Intro to how FX and CFD brokers manage price risk: A-Book vs. B-Book, markup and commissions, netting vs. position-based P&L, internalization, and C-Book tactics.
For FX and CFD brokerage owners, COOs, dealing desks, risk managers, and new hires who need a practical grasp of how brokers run price risk and where P&L really comes from. It’s written as a plain-English primer for teams that must understand broker-side mechanics rather than trader tips.
It also fits product and operations leads, choosing between A-Book, B-Book, or hybrid execution, as well as anyone clarifying netting vs. position-based accounts, markup practices, and when to internalize flow.
You’ll learn the core ways brokers handle client-driven exposure: accepting price risk (B-book) vs. transferring it (A-book), how markup and commissions generate P&L, and why negative-markup cases occur. Clear examples walk through netting vs. position-based accounting and the effect on realized and unrealized P&L.
You’ll also learn when and how to internalize opposing trades, where the residual risk sits, and how C-book tactics (partial hedging or reversals) change risk and reward. Use these concepts to design execution policies, choose LP/credit setups, and brief staff on broker-side mechanics with confidence.
