How to...

Guarantee liquidity while maintaining cost-effective hedges

Margin payments are the biggest uncapped liability for Commodity Trading Firms and can reach heights large enough to topple a firm’s entire operations.

OpenGamma Analytics

Frees up over $100m in capital for Mercuria

through

Challenging every margin call

OpenGamma automatically validates CCP and broker margin requirements.

Tracking Consumption

Monitoring real-time margin requirements against the exchanges and attributing margin requirements to trading desks and strategies.

Preventing Inefficiencies

Pre-trade and post-trade optimisations freed up over $100m in capital within 3 months of on-boarding.

“OpenGamma has been key in improving our margin management process, helping us track more closely intraday moves and removing inefficiencies that freed up over $100M in capital.”

WE ARE USED BY 5 TIER ONE BANKS AND MORE THAN 20 BUY-SIDE FIRMS ACROSS THE GLOBE

UNIQUE COVERAGE OF LCH, CME, EUREX, JSCC AND SIMM

Challenges

Funding Challenges

Differences in the timing of MTM between physicals and hedges create short-term cash shortfalls.

Restricted Access to margin financing

Banking regulation constrains the liquidity facilities available to commodity trading firms.

Increasing Margin Volatility

New generation of VaR-based model (span2) coming in 2020 will introduce additional margin volatility.

These factors make it significantly more difficult to accurately size liquidity provisions. This is costing you and your firm.

Active Margin Management

for commodity trading firms

Protect the firm

Don’t leave liquidity to chance, forecast margin to prepare for worst-case scenarios.

Minimise funding cost

Reduce the cost of hedging by adapting processes to drive efficiency.

Analytics

Attribution

Allocate margin consumption to traders

View initial margin (IM) requirements for hundreds, or even thousands of accounts across your firm. It allows you to understand attribution and netting benefits at lower levels of granularity that would otherwise not be possible with broker/CCP statements alone.

What-If

Take identical market positions with less margin.

Achieve pre-trade efficiency by optimising margin for pre-defined amounts of risk across brokers and CCPs. Clients can optimise margin for defined strategies, such as curve and convexity trades and butterflies. In addition to calculating spot margin, we provide forward margin costs in bps for the lifetime of the trade.