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Portfolio Management

Positions, exposure and margin as they move

What actually goes wrong

Seven things you find out the next morning

Risk is not a report. A number that arrives at nine is a description of yesterday.

Most brokerages know their exposure very precisely, once a day, after the close. Which is fine until the afternoon a single instrument moves and the desk discovers that a third of the book was on the same side of it — something that was true at eleven in the morning and knowable at eleven in the morning, had anyone been able to look.

The failures below are all timing failures. The data existed; it was in a platform, or four platforms, and nobody could see across it while it still mattered. What follows each is the part of the module that shortens the distance between something happening and somebody knowing.

  1. 01

    Exposure was a number from last night.

    Positions, floating profit and margin update as the market moves, across every platform you run, on one screen. What the book is carrying is a thing you look at rather than a report you wait for, which is the only form in which the number is worth anything.

  2. 02

    The book was one-sided and nobody had noticed.

    Net and gross exposure by symbol, by group, by currency and by desk, with concentration visible rather than inferred. When most of the book is long the same thing, that is a fact on the screen instead of a discovery made during the move.

  3. 03

    The margin call went out after the stop-out.

    Margin level is watched per account with warning thresholds below your stop-out, so the desk and the client both hear about it while there is still something to be done. A client who is called before the liquidation is a client who might fund; one called afterwards is a complaint.

  4. 04

    Client risk and book risk were different systems.

    The same positions roll up from the account to the client, from the client to the desk and from the desk to the book. Drilling from an alarming total to the three accounts causing it takes a click rather than a query somebody has to write.

  5. 05

    Hedging decisions were made on a feeling.

    Aggregate exposure per instrument, with A-book and B-book split where you run both, so the decision to hedge is taken against a figure rather than an impression. What was covered and when is on the record afterwards, which is how the decision gets reviewed rather than relitigated.

  6. 06

    One client quietly became the whole position.

    Limits and alerts on exposure per client, per instrument and per group, watched continuously rather than checked. The account that has grown into a risk concentration announces itself before it is one, and the alert names the account.

  7. 07

    Nobody could reconstruct what the book looked like at the time.

    Exposure, margin and position history are kept, so the question of what the firm was carrying at eleven on a Tuesday in March has an answer. Reviewing a bad day requires the state of the book during it, not a summary written afterwards.

What is in it

Positions, exposure, margin, and what it looked like before

Four views of the same data, at four altitudes, from the account to the book.

  1. View one

    Positions

    What is open, where, at what price and at what floating result — across every platform at once, which is the part a single terminal cannot give you. A client with accounts on two platforms has one position list here.

    • Open positions across every platform
    • Floating profit and loss live
    • Entry, current price and volume
    • Stops and limits attached
    • Per account, client, group and desk
    • Closed position history
    • Swap and commission accrued
  2. View two

    Exposure

    The aggregate the desk actually manages. Net and gross by instrument and by currency, with concentration made obvious rather than left to be worked out from a list of positions during the move that makes it matter.

    • Net and gross by symbol
    • Exposure by currency and asset class
    • Concentration by client and group
    • A-book and B-book split
    • Aggregate from copy trading and PAMM pools
    • Limits with alerts on breach
    • Drill from the total to the accounts
  3. View three

    Margin

    Watched per account with thresholds above your stop-out level, so the warning arrives while it is still useful. Notifications go to the desk and to the client on whatever channel they actually read.

    • Margin level per account, live
    • Warning thresholds above stop-out
    • Desk alerts and client notifications
    • Accounts ranked by proximity to call
    • Equity, used and free margin
    • Stop-out history per account
    • Notification record on every warning
  4. View four

    History

    The state of the book as it was, not a summary written later. Reviewing a bad afternoon means seeing what was actually open at the time, and who was told what, at which point.

    • Exposure history by instrument
    • Margin and equity over time
    • Position state at any point
    • Limit breach and alert log
    • Client-level performance history
    • Volume and revenue by symbol
    • Export for review and reporting

Who signs in

One book, six altitudes

The same positions, rolled up differently depending on what the reader is deciding.

  • The dealing desk. Aggregate exposure by instrument, the accounts nearest a margin call, and the drill from an uncomfortable total to the three accounts producing it.
  • Risk. Limits, concentration and breaches, with alerts that name the account rather than describing a category, and the history to review what happened after it has.
  • Sales. Their own clients’ positions and margin levels — enough to make the call before the stop-out, and nothing from another desk’s book.
  • Support. One client’s open positions and margin state, so the question on the phone is answered from the record rather than from a terminal somebody else has open.
  • Finance. Floating results, swap and commission accrual feeding the revenue picture rather than arriving as a separate month-end number.
  • Management. Where the book is carrying risk, which instruments produce the volume, and what the firm was holding on the day somebody asks about.

Exposure you learn about tomorrow morning is not risk management. It is a description of what already happened.

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Questions about the module

Before you run risk from it

What a dealing desk wants to know before it stops watching the terminal.

  • Positions, floating profit and margin update as the platforms report them rather than on an overnight synchronisation, which is the entire point — an exposure figure that is accurate as of last night tells you what you were carrying, not what you are carrying. The aggregate views update alongside the underlying positions, so the concentration by instrument that a desk actually manages against is the current one and not a reconstruction of this morning.

  • Yes, and that is usually the reason a desk wants the module at all. A brokerage running MT5 and cTrader has its gold exposure split across two terminals that cannot see each other, which means the firm’s actual position in gold exists nowhere except in somebody’s head or a spreadsheet built at the close. Here the positions roll up from every connected platform into one figure per instrument, and the drill back down goes to the individual accounts on whichever platform they live on.

  • Limits sit on exposure per instrument, per client, per group and across the book, and they are watched continuously rather than checked at intervals. A breach alerts the operators who are meant to act on it and names the account or instrument responsible, because an alert that says exposure is high without saying where costs more time than it saves. Every breach and every alert is logged, so the review after a difficult day can establish who knew what and when.

  • On thresholds you set above your stop-out level, through the channels the client actually reads — app notification, email, SMS. The desk sees the same accounts ranked by how close they are to a call, so sales can pick up the phone to the ones worth calling. The difference this makes is commercial rather than technical: a client contacted before liquidation may fund and continue, while a client contacted afterwards files a complaint, and every notification sent is on the record if they do.

  • Where you run both, yes — exposure is shown split as well as combined, because the risk the firm is actually carrying is the B-book side and the two need to be legible apart before a hedging decision means anything. Positions arriving from copy trading and from PAMM pools aggregate into the same picture rather than sitting outside it, which matters because a popular copy leader can build a concentrated firm position very quickly without any single account looking unusual.

  • Yes. Exposure by instrument, margin and equity levels, position state and the log of limit breaches and alerts are all retained, so the question of what the firm was carrying at a particular hour on a particular day has an answer rather than an estimate. This is the difference between reviewing a bad afternoon and arguing about it: the review works from the state of the book during the event, including which alerts fired and who they reached, instead of a summary written once everyone already knew how it ended.