Lesson 4.1 - Internal Risk and Exposure Control

This lesson explains how the Desk should think when the company holds meaningful market risk and must manage it through monitoring, evidence, risk status and approved authority paths.

Coverage

This lesson covers three practical areas:

1. How internal company risk appears in daily Dealing Room monitoring.
2. What evidence Dealers should collect when exposure, client activity and company risk impact change quickly.
3. How to escalate risk concerns without taking unapproved action.

Learning Outcomes

After completing this module, trainees should be able to:

• Explain what it means when the company keeps part of the market risk internally.
• Understand why client activity, exposure and company risk impact must be monitored together.
• Identify high-risk situations before they become unmanaged losses.
• Escalate with evidence instead of opinion.
• Separate operational facts from commercial risk decisions.

Practical Scenario

Scenario

Before a major data release, XAUUSD client flow becomes concentrated in one direction and the company's risk impact begins to move quickly.

What a Dealer Should Check

Exposure, client-group concentration, company risk impact, client trading result, pending orders, event timing and quote-source condition.

Common Mistake

Treating company risk pressure as a client misconduct issue, or taking a control action without approval.

Correct Handling

Separate company risk management from client fairness. Record the risk facts, preserve evidence, and escalate to the responsible Risk lead or Shift Leader for review.

Completion Criteria

• Can explain the key risk or operational objective of this lesson
• Can identify the required systems, data, or evidence to review
• Can describe the correct escalation or handling process
• Has completed Shift Leader / follow-up review or practical confirmation