IT Solutions for Trading and Risk Management in Commodities Markets

by Anshuman Jaswal, PhD, December 4, 2008

Abstract

Bangalore, India 4 December 2008

IT Solutions for Trading and Risk Management in Commodities Markets

Commodities are one of the fastest growing markets. Commodities market solutions can no longer be an add-on or secondary offering. The IT infrastructure involved in trading is an important aspect of the market that is often overlooked.

Commodity derivatives have come a long way since the early 1990s and are now considered a separate asset class. Despite the recent downturn in the economy, they are very much here to stay and need to be catered to in an organized and informed manner. It is essential that financial as well as physical players pay attention to the operational and IT requirements of their firms before participating in the commodity markets.

In a new report, IT Solutions for Trading and Risk Management in Commodities Markets, Celent examines the IT requirements involved in commodity derivatives trading and risk management. The report looks at requirements for the front, middle and back offices, along with the risk management needs of each of the following investors: institutional investors, investment banks, trading companies, and corporates. While their needs may vary, they have a lot in common in terms of what they require in an IT solution.

"With the wide array of solutions available, it is important to develop an understanding of the options before buying any product or service," says Anshuman Jaswal, Celent analyst and author of the report.

This report compares the functionalities of 11 leading IT solution providers, looking at aspects such as solutions for the front, middle and back office, commodities covered, technology used, number and type of customers, and level of sophistication. It provides a detailed description of each of the main vendors’ solutions, including their strengths and weaknesses. Readers will be able to make a more informed decision when choosing which solution best meets their needs.

The 50-page report contains 20 figures and seven tables. A table of contents is available online.

of Celent's Commodities research service can download the report electronically by clicking on the icon to the left. Non-members should contact info@celent.com for more information.  

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Bangalore, India December 4, 2008

IT Solutions for Trading and Risk Management in Commodities Markets

Executive Summary 3
Introduction 6
Commodities Market Overview 9
Operational and IT Requirements for Trading 11
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  13
IT Solutions for Trading and Risk Management 14
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  41
Conclusions 47
Going Forward 48

 

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