Sunday, May 8, 2011
Tuesday, May 18, 2010
In my opinion, monitoring risk in real time is an indispensible tool to ensure market stability. My recently written white paper on 4th Quadrant commodity trading, I show that concepts applied to commodity trading emphasize the need for organizations to manage risk in real time. This recent CFTC advisory is an attempt to create external discipline to ensure that trading entities not have such concentration risk. Such concentration risk not only puts an entity out of business but also disrupts the market as a whole. Many FCMs enforce ‘pre execution’ position limits to limit order beyond a certain size. That is fine but it does not view overall position in conjunction with the trades already on an entity’s book. This requires a real time trading and risk system that monitors each trader’s total position along with the entity’s total position in real time. And it ensures that positions not only comply with the law but also comply with the internal risk policy and risk management’s best practices. Companies should have a risk system that can ensure real time position keeping and alerts. Companies need to develop a way to ensure connectivity with exchanges and FCMs to get positions in real time, or they buy risk systems from vendors.
I think that this ruling should start conversations in the IT, Risk Departments, and with the Principles of commodity trading funds (Algo funds, CTA, or hedge funds) about installing such systems. It can be a very low cost insurance policy to avoid liquidity squeeze. For further information and to share ideas, feel free to contact me at directly at SunGard Energy and Commodities:
Moazzam Khoja, CFA
SunGard Energy and Commodities
Kiodex Real Time provides a complete solution for monitoring intra-day compliance, please contact us for a free consultation :
Free Whitepaper and Intra-Day Compliance Monitoring Consultation
Moazzam is senior vice president of strategy for SunGard Kiodex. He has worked for the past thirteen years in the commodity risk management area including issues related to commodity derivatives valuations, structuring of complex energy and credit derivatives, and hedging process and analysis. He has authored several articles in leading industry publications to address these issues. He obtained his MBA from the Columbia Business School in 1996 and his chartered financial analyst designation in 2003.
Tuesday, November 17, 2009
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Best regards,Sean Carnahan
CLICK HERE TO REGISTER NOW for NAESB 1.9 : part 1
Friday, October 16, 2009
SunGard Energy & Commodities Web Seminar: Lessons for Financial Risk Management from the Great Recession
Register for this free SunGard Energy & Commodities Webinar
What has the financial crisis taught us about risk management? Do you think the "reach for yield" distort the market's risk preferences?
Join SunGard Energy & Commodities and Dr. David Rowe in this complimentary 60-minute Web Seminar. Learn about the evolution of risk management, where it failed during the credit crisis and the lessons we learn from it. See, how these lessons impact the energy markets.
Learn from this expert in the risk management industry about:
- Statistical entropy - the inherent limits of quantitative tools
- Importance of structural imagination - why we neglected dimension of risk analysis
- Self-Referential Feedback - the danger of corrosive feedback loops in pricing and risk management
- Complexity and Dark Risk - intransparency breeds hidden dangers
- Alternate Means of Valuation - ignore a possible failure of liquidity at your peril
Discuss with David the attention which has been paid to Value-at-Risk (VaR) as a tool for risk estimation and his definition for VaR not being the "worst case loss".
Below link is to register for this free SunGard Energy & Commodities Webinar
o Date: October 29, 2009
o Time: 10:00am CST (4:00pm CET*)
Best regards,Sean Carnahan
Friday, October 2, 2009
Friday, September 4, 2009
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