Risk groups and dealing room basics for B-book brokers

Understanding exposure in a B-book

Exposure is the net market position your brokerage holds because it took the other side of client trades. If clients are net long 50 lots of XAU/USD, your book is effectively short 50 lots. If gold rises, clients gain and you lose.

Client trades in opposite directions partly cancel each other. That is why exposure management focuses on the net position per symbol, not the gross volume. A book with 500 lots long and 480 lots short of EUR/USD has only 20 lots of net exposure.

Key exposure metrics to track

• Net open position per symbol, in lots and in account currency.
• Floating P&L of the book, meaning the unrealised result for the broker across all open client trades.
• Concentration: how much of the exposure sits with a small number of clients.
• Correlated exposure: positions in related instruments, such as several USD pairs or several US indices, that move together.
• Realised P&L by period, to see whether the book is performing as expected.

If you are still deciding on your execution model, read A-book vs B-book vs hybrid first.

Segmenting clients into risk groups

Risk groups are categories of clients who share similar risk characteristics. Instead of treating every client the same, the broker applies conditions and routing that fit each group. This is the foundation of broker risk management in B-book and hybrid models.

Common ways to segment

• By profitability: consistently profitable accounts versus break-even or losing accounts over a meaningful sample of trades.
• By volume and size: average lot size, deposit size and total traded volume.
• By trading style: scalping, news trading, swing trading, grid or martingale strategies, expert advisors and copy trading.
• By account age and history: new accounts with no history versus accounts with months of data.
• By source: affiliate, IB or marketing channel, since some sources bring very different behaviour.

A simple starting structure

Review groups on a schedule, for example weekly, and move clients when their behaviour changes. A label is a starting point, not a permanent judgement.

Per-group spreads, leverage and limits

Once clients are grouped, each group can receive its own trading conditions. The main levers are:

• Spread markup: a slightly wider spread on high-risk groups reduces the edge of very short-term strategies.
• Leverage: lower leverage limits the size a client can open relative to their equity.
• Limits per symbol: maximum lot size per order, maximum open volume or maximum number of positions on a symbol.
• Instrument access: some volatile symbols can be restricted for specific groups.
• Minimum holding time or execution settings, where your platform and policy allow and where clearly disclosed.

Monitoring and hedging thresholds

Exposure management is a continuous process. A risk manager or dealing team watches the book in real time and acts when predefined thresholds are reached.

Setting hedging thresholds

1. 1Define a maximum net exposure per symbol, in lots or in money, that your capital can safely absorb.
2. 2Define a maximum floating loss for the whole book before action is required.
3. 3Decide what action happens at each level: alert, reduce limits for new trades, hedge part of the exposure with a liquidity provider, or route a group to A-book.
4. 4Plan for events: central bank decisions, major data releases and weekend gaps often need lower thresholds.
5. 5Document everything so the policy is applied the same way every time.

Hedging requires a liquidity provider connection. Not every B-book broker hedges; some smaller brokers rely on limits and capital buffers instead. Either way, thresholds should be written down before a crisis, not during one. The people who watch these thresholds usually sit in a dealing room, explained in what is a dealing room.

Spotting and handling toxic flow

Toxic flow is trading activity that is consistently profitable against the broker for structural reasons rather than market skill. Common examples include:

• Latency arbitrage: exploiting delays between the broker's price feed and faster external prices.
• News spikes: opening positions in the seconds around major releases when prices gap.
• Abuse of bonuses or promotions through linked accounts.
• Hedging across brokers to exploit swap or bonus differences.

Signals to watch include very short average holding times, very high win rates, trades clustered around news, and many accounts sharing the same IP address or device. A reliable price feed reduces the room for latency arbitrage.

Handling options include moving the account into a high-risk group, adjusting conditions, routing to A-book or, where your terms clearly allow it, closing the relationship. Profitable trading by itself is not abuse; skilled traders should be handled through fair routing, not punished.

Margin call and stop out policy

A clear margin call and stop out policy protects both the broker and the client from negative balances. The margin level is usually calculated as equity divided by used margin, shown as a percentage.

• Margin call level: the margin level at which the client is warned, for example 100 percent, though levels vary by broker.
• Stop out level: the margin level at which positions are closed automatically, often starting with the largest losing position, for example 50 percent or lower.
• Per-group settings: some brokers apply different levels to different groups, which must be disclosed.
• Negative balance protection: required in some jurisdictions for retail clients, and good practice elsewhere.

The exact levels are a business and regulatory decision. What matters is that they are automatic, consistent and stated clearly in your client agreement.

Account controls and audit logs

Good risk management needs a clear record of who did what and when. Audit logs let you review changes to spreads, leverage, limits and account statuses, investigate disputes and show regulators or auditors how decisions were made.

• Log every change to trading conditions, with the user who made it and the time.
• Log logins and actions by both staff and clients.
• Restrict risk settings to specific roles with roles and permissions, and protect staff access with an IP whitelist.
• Use account statuses deliberately: a suspended account can still log in but cannot trade or move money, while a disabled account cannot log in at all.

Because risk decisions affect sales and retention conversations, it helps when the risk tools live in the same system as your broker CRM.

How EVO helps B-book brokers manage risk

EVO Platforms is a white-label brokerage technology provider built for B-book brokers. EVO is not a broker and does not hold client funds.

Available today in the EVO back office and risk tools: spread control, limits per symbol, leverage per client, automatic margin call and stop out, TP/SL control, suspended and disabled accounts, roles and permissions, IP whitelist and security logs where every click by CRM users and clients is recorded. Risk groups and a dealing room are coming soon in EVO's back office, so dedicated group-based conditions and a live dealing screen are not available yet. Until then, brokers apply conditions per client and per symbol. Specific integrations, such as liquidity provider connections for hedging, can be scoped through custom development.

Frequently asked questions