Pricing Retail & Structured Products
- First: capture diverse retail or physical energy, or financial structured products with complex fields, rules, constraints, and payoff formulas.
- Second: price their complex cash flow and value, and exported selected pricing figures, in the form of Pricing Proposal Memos to be sent by marketing to end clients as offers.
- Thirdly: ability to perform settlement, MTM, cash flow projections and risk analysis.
1. You designate a subset of the deal fields involved in its cash flow valuation, as input parameters to pricing. E.g., in retail power deals, these are the energy charges, fees, fuel, and FX when needed.
2. Enter any desired pricing rule in a user friendly tree like editor. Pricing rules are treated as nested trees of mathematical formulas on various input curves and fields with the goal to determine the deal price as the values for a user selected output field. Computations are done via a global Newton recursive algorithm.
3. The rest is fast and easy. Enter a target profit or margin to be achieved by this deal. Click the Compute button. All pertinent values are computed including profit spreads and offer prices. Results are immediately displayed on the interface for your review.
4. Pricing can be done as often as you wish as soon as market prices or forward curves change.
5. Pass-thru and absorbed charges are automatically handled during the pricing, and displayed in separate fields on the deal page.
6. Ability to compute different prices for Peak, Off Peak (OP) and average Time Weighted (TW) energy profiles, when pricing physical energy deals.
7. Upon pricing, a "Pricing Memo" is automatically generated and emailed to a manager. The memo is fully dynamic and can be configured to display the pertinent information of the pricing plan at hand (prices, deal specific parameters and input fields, profit spread) and be used as a MOA offer for your customer.
8. What about post-pricing audit and control? All intermediate and final calculations, along with current state of forward curves used to compute the price are stored as deal fields, upon completion of calculations. This offers an exact snapshot of all data involved in pricing.
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