The books can also be split between asset class, with stocks in one book, and currencies in another, so that positions then don’t net each other out.
A common problem faced by a lot of FX traders is how to manage multiple currency positions at any one time. For example, you might have a multi-faceted view on how a currency move might start to play out, and devise a trading strategy to take advantage of that, but then find yourself limited by what is known as the netting effect.
On a long-term basis, you may have a view that the euro is overvalued and want to be short, but also acknowledge that it’s a crowded trade and be vulnerable to a squeeze higher first. In a normal account you can’t both be long and short of the same currency pair at the same time, so creating a sub-book within your main Trading Book would be a way to address that problem.