**Exposure Tolerance** is an **execution control feature** that **adjusts the pace of execution** between legs in **spread trades**, preventing one side from **filling significantly faster than the other**. Instead of reactively sending **aggressive orders** to balance the legs, the system **proactively modifies execution schedules** to ensure the spread remains within **desired limits**. This helps reduce **unnecessary market exposure**, **minimize slippage**, and **maintain strategic balance**.
### **Key Benefits**
Net exposure during execution
* **Optimized Spread Execution** – Ensures that **one leg doesn’t outpace the other**, reducing unwanted exposure and maintaining more accurate spread pricing.
* **Control and Predictability** – Provides traders with **better control** over trade execution, improving predictability compared to **reactive systems**.
* **Minimized Slippage** – Keeps both legs of the trade in **proximity during execution**, reducing the risk of **price slippage** and imbalanced orders.
This feature is ideal for traders executing **spread, arbitrage, or hedging trades**, ensuring that **both legs remain in sync** while maintaining **optimal market positioning**.
### Dynamic Tolerance
More notional on the longs than on the shorts
In the case that the longs and shorts are not equal in size, the exposure target will be based on a linearly increasing exposure that utlimately ends up at the net $ long - $ short amount. The exposure tolerance will be constant throughout the duration of the order, such as in cases when portfolio rebalances where the rebalance adds or removes the cash balance or multi-legged spreader trades where the notionals do not match.
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