Kill Switch

A kill switch is the emergency stop for a trading system. One action stops order flow for every account it covers. It exists for situations where waiting to cancel orders one at a time would cost more than stopping everything. Firms that trade electronically in the EU work under the MiFID II and MiFIR framework, which ESMA maintains.

In Mercury Pro, activation triggers three things:

1. The system moves into a "Stopped" state.

2. All open orders across supported exchanges and accounts are cancelled.

3. New order submissions are blocked until trading is re-enabled.

When an administrator re-enables trading, the system returns to the "Active" state and order flow can resume.

The control is designed for extreme events: exchange issues, market dislocations and operational incidents. It gives a rapid, controlled response when conditions are outside what normal limits were built for.

Liquid Mercury frames its controls as three layers.

The Risk Engine runs continuously. Its pre-trade checks include available balance, available credit, region restrictions, maximum quantity, maximum amount, a hyper-marketability check and a theoretical price check. Mercury Pro provides position monitoring and configurable exposure limits to help desks manage risk after execution.

Auto-liquidation lets an authorized user flatten all open positions for an exchange account from the Positions window. The system rejects new orders for that account while it runs, cancels existing open orders, then generates and manages closing orders. When it finishes, normal order entry resumes. The user picks one of two execution modes:

Liquidation orders can be configured to bypass the standard pre-trade risk checks, so the system can flatten risk even when limits are tight. If the system becomes unavailable or the kill switch is activated during a liquidation, the associated liquidation orders are cancelled. The system ignores "dust" below exchange minimums and splits oversized positions to respect exchange maximum order sizes.

• Aggressive. Closes positions as quickly as possible by sending market or marketable limit orders repeatedly until the position is closed or a timeout is reached. Where an instrument does not support market orders, it uses aggressively priced limit orders.
• Passive or scheduled (TWAP-style). Spreads the unwind over time to reduce market impact. It splits the position into slices and sends child orders at set intervals over a chosen duration, recalculating the remaining size at each interval. Parameters include total duration, interval, order type and an optional price offset from the top of book.

The kill switch is a toggle in the administrative interface and is restricted to users with admin permissions. It supports all connected venues that expose the necessary cancellation and trading control endpoints.