Overcome Market Volatility with Delayed Hedging: Your Bourse’s Newest Feature
Timing is everything. Market conditions can shift in a pinch, and your ability to respond determines not only your efficiency but how profitable you are too. This is why Your Bourse has introduced the Delayed Hedging functionality, designed to help brokers manage exposure with precision and counteract market volatility.
Below, we’ll explain how Delayed Hedging works, why it’s important for brokers, and how you can integrate it into your operations.
What Does the Delayed Hedging Feature Do?
Delayed Hedging, now part of Your Bourse’s MT5 Coverage Plugin, enables brokers to introduce a predefined delay before hedging trades are sent to the execution venue. This subtle adjustment allows for greater control over hedging timing, helping brokers overcome volatility more effectively while uncovering opportunities to enhance profitability.
Here is how it works:
Imagine a trader buys 1 lot of Gold. Instead of hedging this position instantly, you can configure the system to delay hedging the trade with the Liquidity Provider by, say, 10 seconds—or any time you specify. This delay opens up opportunities to make better-informed decisions in fluctuating markets.
Key Benefits of Delayed Hedging
- Reduce Market Volatility: A short delay allows you to avoid reacting to sudden market fluctuations, giving you time to hedge when conditions stabilise.
- Offset In-House Positions: Use the delay to balance positions within your B-book before engaging the A-book, minimising the need for external hedging.
- Maximise Profitability: Time your hedging to secure better pricing, enhancing your profitability with each trade.
Use Cases
Here are three practical examples of how Delayed Hedging can transform your brokerage operations:
- Avoiding Market Turbulence
- Challenge: Major economic announcements often lead to high volatility, causing unpredictable price swings.
- Solution: Delay hedging by 20 seconds during these periods, allowing the market to stabilise before sending trade requests. This results in a safer and more consistent trading experience for both you and your clients.
- In-House Position Offsetting
- Challenge: Clients with opposing positions create opportunities to reduce external hedging needs.
- Solution: Use the delay to offset positions internally. For example, if one client buys 3 lots of Gold and another sells 5 lots, the system offsets 3 lots internally and only hedges the remaining 2.
- Improving Profit Margins
- Challenge: Market trends can offer better pricing opportunities if timing is optimised.
- Solution: By delaying hedging, brokers can capture favourable price movements. For instance, if Gold price drops after a client’s buy order, delaying the hedge ensures the position is covered at a lower cost, increasing profitability.
Setting Up Delayed Hedging on Your Bourse Cloud
Getting started with Delayed Hedging is straightforward:
- Log in to Your Bourse Cloud and navigate to the Plugins section.
- Select the MT5 Coverage Plugin and click Manage.
- Under Configure Rules, access the Delayed Hedging Rules pop-up window.
- Specify the delay period, target groups, and accounts. Add multiple rules as needed for different scenarios.
- Apply the changes and integrate them into your trading environment.
The Your Bourse Advantage
Delayed Hedging is yet another example of Your Bourse’s commitment to delivering smart tools that give brokers control, flexibility, and an edge over the competition. Whether you’re looking to mitigate risk, improve efficiency, or enhance profitability, this feature has you covered.
Conclusion
The Delayed Hedging feature is a strategic advantage. With this functionality, brokers can reduce volatility, optimise trading operations, and unlock greater profitability.
At Your Bourse, we’re always innovating to help you stay ahead of your competitors. Take control of your hedging strategy today with Delayed Hedging. Your business—and your clients—will thank you.