They unintentionally built up a huge position well beyond their internal capital thresholds. You don't have worry about mark to market to detect that. If you th

They unintentionally built up a huge position well beyond their internal capital thresholds. You don't have worry about mark to market to detect that. If you think your FX strategy could end up with max notional of let's say £50MM, you can put something in place to stop trading if you exceed that. If you are a smaller shop, your prime broker is probably already doing something like that for you. Those types of risk controls (i.e. capital thresholds) are bog standard in our industry and it still kind of blows my mind that Knight managed to get around them so easily.