Dynamic Margin Management™
TRADESPARENT offers a practical method and the necessary tools to manage price risk and margins covering the complete supply chain. Dynamic Margin Management is all about locking in the projected monetary difference between feedstock and the products, to ensure optimal returns.
Applicable in both primary and secondary processing environment this is one of the major developments in performance and risk management practices of the last years. TRADESPARENT has all the components to effectively implement a Dynamic Margin Management program. The program includes a step wise approach and will lead to a full roll out of the TRADESPARENT processing toolkit and Dynamic Margin Management processes.
Introducing Dynamic Margin Management step wise approach:
Create transparency on your physical procurement and sales portfolio, risk exposures and hedging derivatives
- Introduce coordination of procurement and sales activities, levering market views
- Establish market focused risk management governance, policies and structure
- Develop a new way of working within the risk appetite framework and tracking of performance against budget and market indices
- Measurement, monitoring and reporting with TRADESPARENT Margin Management Solution
With the TRADESPARENT Solution in place and the new way of working addressing people, processes and organization you are well equipped to manage through market turmoil in a dynamic way and reap benefits which will have a positive effect on the bottom line.
TRADESPARENT Right to the Point
- Feedstock coverage against planning
- Feedstock coverage against actual sales of end- and by products as well as energy
- Mark to Market on both procurement and sales
- Mark to Budget
- Forward Margin Management dashboard with closed, open and partial margins
- Net risk position, Limits and many other KPI’s and KRI’s
TRADESPARENT has a comprehensive control board, allowing you to freely configure the application in the way you want. From the configuration of imports to the definition of VaR portfolio´s and setting of limits, full flexibility is key and you are in control of the application.
Screening, classifying and tracking of counterparty exposures. Counterparty risk provides insight on volumetric positions, Mark-to-Market and settlement. Counterparties can be assigned to a personal watchlist.
Provides the possibility to design personal, comprehensive risk & margin homepages to support individual preferences. Personal views can be easily built by making an own selection of preconfigured widgets for positions, market prices, Mark to Market, Trade P&L, VAR and limits. Thanks to these tools, TRADESPARENT delivers even faster awareness of exposures and profitability.
Tracking the decline in a P&L (drawdown) supports Value at Risk and Stress measurements. The user sets the threshold for alert and strategy re-think. TRADESPARENT calculates the drop from the last cumulative P&L peak and displays the results in graphs and tables.
A multicurrency platform, capable to work with contracts in all different currencies and units of measure. Shows contracts in both their original currency, as well in the client’s denominated standard currency, including forex hedges. Is able to show P&L’s split up in the results of FX- and commodity price movements, to keep track of detailed P&L’s per area of responsibility.
The TRADESPARENT Processing model has the unique feature to present gross processing margins based on variable cost and revenues. Profit margins can be visualised 18 months forward, giving you the chance to act early to optimise returns or re-think strategy.
Define limit structures around positions, VaR, Drawdown and stress. These limits can be set on a variety of dimensions, like product, product group, entity, country or trade book. Thanks to the display of actuals versus limits you will have timely notification for accurate action to manage risks and results.
Compare current performance versus predefined budget numbers. Not only on an aggregate level, but on a contract-by-contract level as well. Mark-to-Budget uses your budgeted procurement and sales prices as reference and shows the actual performance against budget.
Obtain a better understanding of the performance of each contract against actual market prices at the relevant contract position. The available MtM information can be easily filtered and viewed on a variety of dimensions (entity, subsidiary, product, trade book, etcetera).
Reporting of gross and net positions per product, for both trading as well as processing environments. The Insight module shows positions against planning, which provides processors direct insight in volumes to be procured, sold or hedged.
The Price Catalogue collects and stores all historical, forward and reference prices by location and priority. It provides the ability to construct a harmonised array of market prices from farm to port or factory-gate.
Create self-defined stress portfolios, which can be analysed in a number of ways. These include individual commodity trends and market convergence.
Track your company’s performance and manage its results thanks to daily insight in P&L. TRADESPARENT combines unrealised (Mark-to-Market valuations of open contracts) with the realised P&L. This provides insight in P&L development, split up in organisational units, products, product groups, trade books/business units, plants or any other desired dimension.
Value at Risk
Calculate Value at Risk values based on 3 different calculation models: Historical simulation, Monte Carlo and Parametric. Value at Risk portfolios can be easily configured for organisations, trade books and product groups.
Gain insights, monitor and report on trades, risk exposures and performance with the TRADESPARENT platform, built by commodity specialists for commodity businesses.
Compliant and in control on commodity trade related regulations such as MiFID II, EMIR, FMIA & CFTC, and satisfy internal and external stakeholders with our Regulatory Solution.
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