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CRTM
Software - Main Page
Overview
Resources
related to CTRM, which is Commodities Trading and Risk Management
software. This also includes
‘ETRM’. While the ‘E’ stands for Energy,
as a practical matter, the two terms are used interchangeably to refer to
systems that work with Energy, e.g. Natural Gas, Crude Oil and Power, Metals,
e.g., Gold and Silver, and Softs/Agriculture items like Coffee and Cocoa.
CTRM
Professionals LinkedIn Group
Please join, read and contribute content
Link: CTRM Professionals
Quick Links
See below for
Quick Links. Then go to the following
section for the same links and with short descriptions added.
1) CTRM Software
– General Topics
1.1) Introduction to CTRM
1.2) How to Think Like a CTRM Vendor
1.3) CTRM Ecosystem
1.4) CTRM Jigsaw Puzzle Metaphor
1.5) CTRM System Design Philosophy
1.6) System Security
1.7) Quality Assurance
2) CTRM Software
– Vendor Risk
2.3) Vendor Risk Audit and
Audit-assist Checklist
3) CTRM Software
– Design Considerations for Specific Functionality
3.1) Broker Fees
3.2) Initial and Variation
Margin for Futures
3.3) Interbook Trades
3.4) Trade Payment Calculation Formulas
3.5) Applying Settlement Prices
3.6) VaR ‘Value-at-Risk’
3.7) PnL Benchmarking
3.8) Volatilities
3.9) Futures Closeouts
3.10) Reports/Reporting and Extracts
4) CTRM Software
Implementation Related Topics
4.1) Reference/Static Data as Prerequisite for
Trading
4.2) CTRM System Switching
Strategies
4.3) Migrating Transaction/Trade Data
from a Legacy to New CTRM System
5) Trade
Information
5.2) Trade Lifecycle
5.3) Trade Type Reference
6) Commodity
Overview/Information
6.2) Precious Metals
6.3) Base Metals
6.4) Softs/Ags/Dairy
Note: This (the
below) repeats the above list. It just
adds a one-sentence description for each item.
1) CTRM Software
– General Topics
1.1) Introduction to CTRM
Click the
below link for a great introduction to CTRM software.
Link: Introduction to CTRM Software
1.2) How to Think Like a CTRM Vendor
Better
understand CTRM software by considering things from the point of view of a
typical CTRM Vendor.
Link: Think
Like a CTRM Vendor
1.3) CTRM Ecosystem
Commentary on where things are at now and where they are likely
heading in the future for the Ecosystem of CTRM functionality.
Link: CTRM Ecosystem
1.4) CTRM Jigsaw Puzzle Metaphor
This page
introduces a model of a CTRM based on a jigsaw puzzle metaphor.
Link: CTRM Jigsaw Puzzle Metaphor
1.5) CTRM System Design Philosophy
Provides some Design Philosophy suggestion for CTRM system
designers and builders.
Link: CTRM System Design Philosophy
1.6)
System Security
Introduces the topic of Security for CTRM systems.
That includes security around who can log in, functional level security around
different modules of the overall system, and things like who can trade in which
‘portfolios’ (also known as ‘Trade Books’).
Link: System Security
1.7)
Quality Assurance
Introduces the
topic of Quality Assurance, i.e., Testing the
Software, for CTRM systems. Also makes
the case of the importance of the ‘Assurance’ part of QA.
Link: Quality Assurance
1.8)
Operations and Support
Introduces the topic of ongoing operations and support for a CTRM
system. This is from the point of view of the group,
typically the IT/Tech group, who performs the following activities: helping the
users, answering their questions, resolving minor issues, fixing bugs in
custom-written code, logging software issues with the vendor and working on
bigger customizations/developments.
Link: Operations and Support
2) CTRM Software
– Vendor Risk
Provides an
introduction to Vendor Risk Management in the context of CTRM Software,
including observations and considerations on how the rise of Big CTRM impacted
the Vendor Risk profile of impacted firms.
Link: Vendor Risk Management
Provides things that firms can to do reduce their vendor risk and,
more importantly, things that also reduce TCO (total cost of ownership) and/or
increase value in other ways.
Link: Vendor Risk Mitigation
2.3) Vendor Risk Audit and Audit-assist Checklist
Click on the
link below for recommended practices for a firm using a Big CTRM system around the
concept of a ‘Vendor Risk Audit’ and provides a useful checklist to help with
the process.
Link: Vendor Risk Audit and
Audit-assist Checklist
3) CTRM Software
- Design Considerations for Specific
Functionality
3.1) Broker Fees
CTRM Design
Considerations around Broker Fees
Link: Broker Fees
3.2) Initial and Variation Margin for Futures
CTRM Design
Considerations around Initial and Variation Margin for Futures
Link: Initial And Variation Margin for Futures
CTRM Design
Considerations around Interbook Trades
Link: Interbook Trades
3.4) Trade Payment Calculation Formulas
CTRM Design
Considerations around Trade Payment Calculation Formulas
Link: Trade Payment Calculation Formulas
3.5) Applying Settlement Prices
CTRM Design
Considerations around Applying Settlement Prices onto Trades
Link: Applying
Settlement Prices
3.6)
Intro to VaR ‘Value-at-Risk’
This page
provides readers with a high level introduction to Value-at-Risk, known as
‘VaR’.
It also
contains the best description and comparison of the three methodologies as used
by the industry that you’ll ever read.
They go by the names of ‘parametric’, ‘historic’ and ‘Monte Carlo’.
Link: Intro to VaR
3.7)
PnL Benchmarking
This page
introduces PnL Benchmarking, which compares the PnL (Profit/Loss) for actual
trades to one or more benchmarks. The
Benchmark would be something like a benchmark portfolio of hedges based on a
corporate standard. The idea is to
compare the PnL of the actual
hedges/trades done to set of theoretical trades.
Link: PnL Benchmarking
3.8)
Volatilities
Explains what
are ‘Volatilities’ and how are they used by CTRM systems and how to calculate
them.
Link: Volatilities
4) CTRM Software
Implementation Related Topics
4.1)
Reference/Static Data That Are Prerequisites for Trading
Comprehensive
list of data items needed to prepare a CTRM system for trade entry. While we
are calling it as an intended-to-be-generic name, note that this is commonly
called other terms like ‘Static Data’ or ‘Reference Data’.
Link: Reference/Static
Data as Prerequisites for Trading
4.2) Strategies for Switching CTRM systems
Strategies and considerations for migrating from one Vendor system
to another or for switching from a vendor-supplied system to a home-grown solution
or vice-versa.
Link: CTRM Switching Strategies
4.3) Migrating
Transaction/Trade Data from Legacy to New System
Specific considerations for migrating transaction (Trades) from
one system to another.
Link: Migrating Transaction/Trade Data
from Legacy to New System
5) Trade
Information
Commentary on items that are considered ‘Trades’, i.e., tradition
trades with counterparties or exchange-traded and things that are not trades
like physical inventory, both of which are supported by CTRM systems.
Link: CTRM Trade Type
Taxonomy
5.2) Trade
Lifecycle
Information on what people term as the ‘Trade Lifecycle’.
This puts together, for better understanding, all of the various events
and/or things that happen to a trade from beginning to end.
Link: Trade Lifecycle
5.3) Trade Type
Reference
Information on Trade Types like Commodity Swaps.
Link: Trade Type Reference
6) Commodity
Overview
6.1) Energy
Covers the Big
3 Energy Commodities, Crude Oil/Refined Products, Natural Gas and Power
(a.k.a., Electricity)
Link: Big 3 Energy Commodities
6.2) Precious Metals
Introduces
Precious Metals like Gold and Silver, in the context of CTRM design
Link: Precious
Metals
6.3) Base Metals
Introduces
Base Metals like Copper and Aluminum, in the context of CTRM design
Link: Base
Metals
6.4) Softs/Ags/Dairy
Introduces
Softs like Coffee, Agricultural Commodities like Wheat and Dairy
Link: Softs/Ags/Dairy