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QR Hedging & Deal Linking

Define and Manage Hedging Programs
Deal Cross Linking & Coverage
Under-above Hedging and Covering


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Flexible Deal Covering and Hedging Management

QR Trading enables transaction cross-linking based on their asset classes and various business objectives, in a completely configurable manner. Linking relationships can be many-to-many. One deal can cover several other deals at different percentages of its volume. You can define multiple notions of deal covering depending on business objectives. The possibilities are endless to model all aspects of your financial and physical operations. Example of deal linking:
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    Hedging is a primarily type of deal linking.
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    Deal covering in energy and commodity operations: physical transactions are linked to production, logistics and financial hedges.
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    Deal covering in electricity operations: physical “demand or load” (retail and wholesale) can be covered by physical “power supply or generation”, which can themselves be covered by “transmission” deals. This can then continue into financial hedging as follows. Physical “power generation” transactions can be hedged by financial “fuel swaps”, which can themselves be hedged by FX futures.
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    In treasury, instruments involved in AP and AR are linked to FX hedges.
Hedging
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    Assets, liabilities and investment products can be linked to cash, liquidity and payments across different time horizons.
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    Supply chain components can be cross-linked to invoice payment schedules for dynamic discounting.
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    Transactions can be linked to counterparty for collateral management, credit risk and exposure limit monitoring.
Dynamic Management

Dynamic Management of Hedging/Linking Programs

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    The Module automatically creates a covering/hedging program to cover all underlying deals with the assigned cover/hedge deals in the proportion needed. It does so by using existing covers/hedges not fully utilized or by creating new ones.
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    Dynamically manage "over" and "under" covered/hedged positions. Create, add or remove a link.
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    Risk control reports track hedging or covering policies and breaches of various thresholds such as hedging ratios with respect to some underlying.
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    Seamless integration with the risk module for hedge risk reporting.
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    “Over” and “under” covered/hedged positions undergo MTM and Cash Flow Analysis, allowing portfolio managers to effectively run covering/hedging programs.
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    Pre-trade MTM and VaR valuation of hedges to insure compliance.

Next Generation Dual-use Cloud On-site Architecture

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  • Trading, Assets & Portfolio Cloud Services

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