Commodity Derivatives
Calypso® Commodity Derivatives solution is a fully integrated component of the Calypso application, utilizing the same proven back office and risk management functionality. Calypso supports all trade capture, risk management, hedging activity and lifecycle processing for financial commodities trading in a complete cross-asset solution. Benefits include:
- Flexibility in creating and adding new commodities
- Intuitive and efficient trade entry – from vanilla to exotic products
- True cross-asset coverage on common analytical
- framework
- Integrated cross-asset risk and back office processin
During the current dramatic swings in volatility; new financial instruments, hybrid securities, and rapidly advancing industrialization in major economies are driving the global commodities markets to record growth in recent years. The net effect is intensified activity in commodity trading and increased competition.
With fuel, precious metal and agricultural product prices near or at historical highs, commodities and their associated derivatives are being traded more widely than ever by diverse financial market participants. New commodities sectors have emerged such as weather, emissions, and freight derivatives. As a result of regulations aimed at reducing greenhouse gases and noxious emissions, carbon and emission credit cap-and-trade markets are being established worldwide. Businesses of all types are now being thrust into the commodities markets, increasing the customer base and trading volumes for sell-side commodity desks.
There is a greater focus on managing risks, particularly volatility. In addition to traditional consumers in the commodities marketplace, new entrants – hedge funds, pension fund managers and alternative investment managers serving the retail sector – are rushing to this market to take advantage of the potential for greater returns.
All these inter-related factors are taxing the ability of legacy systems to price, risk manage, and process commodities and commodity derivatives. Institutional investors are also beginning to evaluate the correlation of commodities against other financial assets, creating demand for structured products such as commodity-linked notes or contracts. The growing sophistication of investors has resulted in demand for cross-asset systems with common analytics for managing increasingly diverse portfolios.
Calypso’s Commodity Derivatives software solution is fully integrated with the award winning Calypso back office system. Commodities can be processed on the same platform as other derivatives – treasury, or securities products.