Commodity Derivatives

The rapid growth of commodity derivative products offered across all sectors – from energy (oil, gas, electricity, etc.), agriculture and metals to weather, emissions, and freight derivatives – is evidence that businesses of all types understand that the commodities markets have a major impact on their bottom-line.

Calypso® Commodity Derivatives is a comprehensive cross-asset front-to-back solution which fully support all trade capture, risk management, hedging activity, and lifecycle processing for commodities trading. Standard interfaces to real-time market data and electronic trading platforms allow for real-time automated trade entry, valuation, hedging and position management.

Calypso’s trade flexibility adheres to each business’ market data construction methodology. With Calypso, traders can drill-down to the individual portfolio trade level for faster hedging and position management.  View and generate sensitivity results on underlying commodity swaps, curves and spread volatility surfaces with multiple tenors.

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.

Supporting Emerging Commodities Products

With the advent of carbon regulations aimed at reducing greenhouse gases and noxious emissions, entities that emit CO2 will have to track and manage emissions allowances which can be used to offset their carbon emissions in order to remain profitable. Projects are being financed through the Clean Development Mechanism (CDM) around the world to offset emissions, with the hedging and risk management being handled by banks and hedge funds. Calypso’s Commodity Derivatives platform provides end-to-end management capabilities for carbon trading.

In times of economic turmoil, the global commodities markets have demonstrated stability and the net effect is intensified activity in commodity trading and increased competition in the asset management and investment space. Many participants are also active in the physical markets, combining derivatives with the actual delivery of the commodity to provide services throughout the supply chain. Calypso’s Commodity Derivatives solution offers solutions for both the financial and physical commodity markets.

Broad Commodities Product Support

Supported Instruments	Partial Array of Commodity Sectors
Futures	Energy WTI crude oil Henry hub natural gas Dated Brent Gasoil
Options
Swaps Asian Future look-alike Exchange cleared Basis Variance
OTC options Asian Bullet Physically exercised	Base metals Copper Aluminum Zinc
Index swaps Total/excess return	Precious metals COMEX gold, silver TOCOM gold, silver Platinum, palladium
Swaptions	Agriculture and livestock CME live cattle CBOT wheat SAFEX maize
Forwards	Weather Heating/Cooling degree day derivatives
FRA’s	Freight NYMEX/Clearport freight futures
	Emissions EUA’s CER’s NOx SOx