Easy Trade Risk Manager

Easy Trade® Risk Manager (ETRM) is a real-time position keeping and risk management suite designed to implement consistent risk methodology across multi-currency and multi-asset class trading platforms, supporting both institutional and retail trading.
At the heart of ETRM is the pre-trade risk engine, built to deliver real-time calculations on complex portfolios. The risk engine takes into account deals done and also calculates the Worst Net Positions (WNP) relative to outstanding orders so as to give a more realistic picture of the global position and the risk exposure.
Due to the innovative design of ETRM, it is able to meet the requirements relating to
pre and post-trade activity in an open, complete and flexible environment. Furthermore ETRM is capable of delivering real time risk management activities in an “IN Trade”environment meaning that orders are incorporated to allow advanced what-if simulations.

Position Keeping
The position keeper is a module that manages and processes deals (in real-time)
captured either from external order management systems or directly from the
exchanges. All deals received are organized into two different views which are
categorized by
1. Portfolio and instrument
2. Counterpart and exchange currency
Portfolio positions and counterparty exposures are updated every time a new deal is
imported as well as every time an instrument price or risk indicator changes.
Realized P&L and theoretical P&L for all portfolios and open positions are calculated
every time an event triggers the CEP engine.

PRE-Trade Validation
ETRM pre-trade module allows brokers to apply controls at each hierarchy level desired
based on risk or operating profiles.
For each new order ETRM can check MiFID compliance, position limits, capital
adequacy, initial credit, leverage, P&L limits, amount and size limits as well as trading
limits.
ETRM pre-trade proxy also enables brokers to actively monitor DMA accesses and in
normal conditions the proxy mirrors the DMA order/deal flow without any impact on
latency. Filters are activated only when deal or WNP risk manager limits are broken.

IN-Trade Risk Monitoring
In order to avoid false alarms being generated by spikes, a time interval can be defined
for each risk variable. If limit violations are still active after the time interval elapses,
then alerts are generated by the system.

POST-Trade Risk Monitoring
ETRM post-trade module enables risk managers to control their risk exposure in real
time. Each position is monitored and updated every time a deal is closed and/or when
the instruments’ prices change. Portfolios can be organized in hierarchies to facilitate
better monitoring of risks at various levels. ETRM provides a portfolio and counterparty
comprehensive risk analysis.

Complete
“Complete” coverage of margin calculations is ensured by a dedicated engine capable
of supporting either the major official margin calculation methodologies (SPAN®,
TIMS®, RBM®, MEFFCOM2®, SPANLIFFE®, etc) or proprietary methodologies.
The appropriate algorithm is linked to the type of derivative instrument within client
portfolios according to market definitions and/or the rules qualified by the risk
department. ETRM gives risk managers the tools to create new rules or import them
from the IT SOFTWARE development centre and apply them without switching off the
system.

No Latency
ETRM processes are built in order to calculate pre-trade validation filters in less than
200 microseconds, even in the case of large and complex portfolios.

Open
Being “Open” is a key element of the ETRM suite. In order to satisfy this requirement,
ETRM was built with a rich set of APIs to facilitate easy integration with other trading
platforms/OMS’s, exchange feeds and middle/back office systems. ETRM calculation
engines can also be embedded in client proprietary systems to deliver specific tasks.

Flexible
ETRM “Flexibility” allows clients to use different sets of risk parameters and trading
limits in pre-trade validation. Rules are organized into risk, operational and monitoring
profiles and are linked to accounts and portfolios. Different rules can be defined for
different time-frames, for example the margin limits requirements can be increased
towards the close of the trading session.