A rapidly growing segment of investment managers trade both derivatives and cash securities, reports Calypso Technology.
Calypso, a provider of cross-asset front-to-back technology software for financial markets, recently commissioned a survey that found derivatives use on the buy-side is increasing significantly. Nearly 45% of the 189 survey respondents reported an increase in foreign exchange (F/X) derivatives trading since 2008, and nearly 60% of that group trades daily or weekly.
At the same time, the survey showed that most investment managers find the situation challenging. Four in five respondents said derivatives cause them concern from both a risk management and an operations perspective.
“Low yields and increased volatility have driven investment managers into sophisticated strategies that require derivatives,” said Charles Marston, chairman and chief executive (CEO) of Calypso Technology. “This has put a strain on their legacy front-office systems as well as their trading infrastructure.”
In response, the company has launched the Portfolio Workstation, a multi-asset solution designed specifically for this group of investment managers. Calypso said that the application seamlessly integrates real-time portfolio and risk management functionality with its front-to-back trading and collateral optimisation platform.
The Portfolio Workstation is described as a real-time command centre that allows mangers to monitor their position values and risks, initiate trades, and perform what-if analysis. It also calculates both realised and unrealised gains/losses and allows managers to select custom benchmarks for accurate performance measurement.
Treasurers are more interested in cross-border payments and automation than real-time payments, as they are consistently asked to do more with less, argues Rick Burke, head of corporate payments at TD Bank in an exclusive interview.
On the third day of the Singapore Fintech Festival conference, there was a focus on specific applications of fintech innovation. One was trade finance, which is clearly is ripe for a revolution.
The EU and US’ shift in accounting standards may bring balance sheet losses and increase credit risk, according to James Elder, director of risk services at Standard & Poor’s (S&P) Global.
Today the bank of England announced it would base interest rates from 0.25% to 0.5%. We have collated some initial comments from the industry on how this will impact the markets: