Products / Risk Management

FX AutoHedge

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Summary

Exposure hedged the moment it exists.

The gap between an exposure appearing and someone hedging it is operational, not strategic: it exists because a person has to notice first. FX AutoHedge closes it with rules that watch OTC deal flow and exchange positions at the same time, holding net liquid exposure and online P&L in view and executing the offset the moment a threshold is crossed.

It runs three hedging modes - offset every deal, net the flow and hedge the residual, or run the book to a defined risk appetite - so each book is matched to the policy it actually needs. As a module of the QUARTIX Markets® platform, it hedges the flow the desk prices in AutoQuote without anything being re-keyed in between.

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Benefits

Rules instead of attention, a mode per book, every offset logged.

Hedging fires on a rule, not on attention

Thresholds are configured per deal or on aggregate net exposure by direction, and they are evaluated continuously. Exposure that appears at a busy moment is treated exactly like exposure that appears at a quiet one - which is the whole point, since the expensive gaps are never the ones anybody was watching.

A mode per book, not one policy for everything

Offsetting every deal one-for-one, netting the flow and hedging only the residual, or running the position against a defined appetite are three different answers to three different books. Choosing per book means the desk stops paying to hedge flow that would have offset itself, and stops carrying risk it never meant to hold.

Every offset on the record

Each executed hedge is logged with the deal that triggered it, the condition that fired, the execution price, the counterpart and the timestamp, exportable for post-trade review. It is what makes a hedging rule reviewable: not whether it was reasonable in principle, but what it actually did.

Net exposure is what remains after opposing positions in the same risk factor cancel each other out. A desk that has bought and sold the same currency in similar size through the day may show heavy gross volume and almost no net position. Hedging works on the net figure, because that is the part still exposed to a move in the market.

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