Precious metals markets are red hot and FX movements are being sharply driven by a volatile mix of policy uncertainty, geopolitical risk and leverage. For brokers, this trading environment brings significant opportunity, but it also brings meaningful risk. Amid such high levels of uncertainty, brokers that are absorbing too much exposure or operating without robust controls could find themselves in a vulnerable position.
This is where the right liquidity provider becomes critical, not just as a source of deep and reliable liquidity, but as a strategic partner that helps you navigate volatility.
Why a dynamic risk strategy matters
It’s worth stepping back and asking what a risk strategy really means. It isn’t about reacting to events as they occur. It’s about defining an approach that aligns with your business model and implementing effective controls to maximise gains while mitigating downside.
At the same time, this strategy needs to be dynamic rather than rigid. As conditions change, and as your business grows or client expectations shift, you need the flexibility to adjust pricing, exposure and market access without disruption.
Current conditions offer a clear example. With extreme moves in XAUUSD and XAGUSD – as broad dollar weakness becomes the macro story of the moment, and money continues to pour into precious metals – many brokers may find themselves needing to rebalance exposure. In periods like this, careful risk planning, and ongoing risk management, can make all the difference.
Risk management by design
At Finalto, our risk framework is designed to maximise value for our clients responsibly, and as market conditions evolve.
We manage risk by setting margin requirements and Net Open Position (NOP) limits that strike a careful balance between what is realistically achievable in the interbank market and the level of leverage we can responsibly offer to clients. Each asset is assessed individually, considering liquidity conditions, market volatility, geopolitical factors and broader capital conditions.
Clients benefit from a highly capital efficient setup, with a single account, a single API and cross-netting that reduces margin requirements and frees up capital. Our offering is supported by real-time risk technology that continuously monitors exposure, generates alerts and applies automated controls, offering highly responsive, transparent and fine-grained risk management.
As Finalto Senior Risk Manager Kiran Lachani explains: “Our risk framework is engineered for performance in volatile markets, as demonstrated in the recent, and ongoing volatility in precious metals. With robust, real-time controls over net open positions (NOPs) and dynamic margin requirements, we actively manage exposure without compromising liquidity or pricing. Fully integrated across risk, dealing, sales and client services teams, this approach allows us to move decisively as conditions change and consistently deliver strong, reliable outcomes for our clients.”
Lachani emphasises that effective and sustainable risk management is an ongoing and collaborative process: “We work continuously and collaboratively with clients to refine and optimise NOPs and margin requirements as market conditions and trading patterns evolve.”
In volatile markets, partnerships matter. Get in touch with Finalto to learn more about our award-winning liquidity solutions and industry-leading proprietary technology,
All opinions, news, research, analysis, prices or other information is provided as general market commentary and not as investment advice and all potential results discussed are not guaranteed to be achieved. The information may have been derived from publicly available sources, company reports, personal research, or surveys. Past performance is not indicative of future performance. Trading carries risk of capital loss. Service available to professional clients only.
