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How Can a Derivatives Exchange Detect and Prevent Market Manipulation across Its Products?

Exchanges use real-time, cross-market surveillance, pre-trade risk controls, and post-trade analysis to detect and prevent manipulation.
Greeks.Live13.11.25

How Can a Derivatives Exchange Detect and Prevent Market Manipulation across Its Products?

Derivatives exchanges employ sophisticated, cross-market surveillance systems to detect manipulation. These systems monitor trading activity in real-time across both spot and derivatives markets for patterns indicative of spoofing, wash trading, and front-running.

They look for correlations between large order submissions/cancellations on one market and price movements/executions on another. Prevention involves implementing pre-trade risk controls, such as price collars and position limits, and post-trade analysis to identify and penalize bad actors.

Robust Know Your Customer (KYC) and Anti-Money Laundering (AML) checks are also foundational.

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How Do CEXs Typically Enforce Rules against Internal Front-Running?
How Does Pre-Funded Margin Differ from Traditional Post-Trade Margin Calls?

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