Pricing and Revaluation
The Need To Control Your Derivative Positions
The level of comfort with the management of derivative trades is very much dependent on the organisation and the resources at hand. For a bank trader, backed up with a wealth of data, a team of quantitative analysts and risk management controls, it is possible to plunge headlong into the most complex of derivative structures. At the other end of the scale however, there can be limitations of software, reliable data and understanding of the products being traded. For organisations who have derivate trades on their books, such limitations lead to increased risk and may not be tenable in the face of increasing regulation.
To generate reliable and accurate results, you obviously need reliable and accurate software. But the requirements run deeper than this. Software on its own cannot ensure that it is correctly used or that the results are properly interpreted. This is where a reliable and expert support team needs to be no more than a phone call away. Also, where appropriate the users of the software tools need to be aware of the behavior and exposures of the structures that they are managing. Training therefore becomes an important requirement.
Below are a list of challenges and issues relating to the use of derivatives, the roles of revaluation and the changing regulation. In addition to each discussion there is an explanation as to how Trading Technology Australia has structured its service offering to address the individual challenges of each area.
