The Hidden Value in Automated Counterparty Management

While your overall PnL may be ok on the surface, if you dig a little deeper the results can be really quite surprising as you discover there are multiple ways you may be losing money without even knowing it. 

Not all flow is equal, so it can be difficult to manage it in an efficient, effective way. It’s also important to note that different categories of flow may require different approaches to risk management.

There are a number of reasons for this, including simple PnL, commission and rebates, or some flow only being monetisable via sophisticated algorithmic techniques and predictive trading signals. 

Automated counterparty management maps out trading behaviour to risk management strategies, helping brokers and many other users in a number of areas, including avoiding loss of PnL, supercharging your B-Book, and quickly catching negative client trading behaviour.

The feature also allows clients to classify new accounts based on similar accounts. For example, those who use the same Expert Advisor. At MahiMarkets, we work closely with our clients to understand exactly the kind of classifications you require and automate the management of your flow across assets. 

How our clients have benefited

A B-Book broker of ours wanted to better monetise their portfolio, so we applied a variety of treatments including some of those listed above. 

Traditionally they B-booked almost 95% of their flow and were happy with the results. In reality, they could have been making much more money in three areas:

• Vulnerable price - we applied our pricing models to drastically improve pricing.

• Policing EAs and counterparties led to preventing large losses.

• Used automated classification to classify counterparties to the correct books.