Commodity Business Operation Lifecycle
Advisory

Advisory Services

Business Process Optimization

Energy Risk Management

Software Selection

Program Management

Renewables

Power Purchase Agreement (PPA) Management

Data Analytics Enablement
Data Transformation

Data Driven Success

Data Transformation

Analytics & Reporting

Database

Analytics & Reporting

Managed Services

Allegro

RightAngle

Other CTRM Products

Expertise on Demand

Allegro

RightAngle

Other CTRM Products

Testing Services

Testing Services

Business Process Outsourcing

RightAngle

Other CTRM Products

CTRM Journey

CTRM Journey

CTRM Training

CTRM Implementation

CTRM Implementation

CTRM Upgrades

Allegro

RightAngle

Other CTRM Products

ISO Services
Life At ValueCreed

Consultant's Journey

Culture

Employee Training
Programs

Wellness

Entrepreneurship

Learn by Example

Workcation

Gaming Zone

Client Training

Client Training

Careers

Careers

Digital Transformation

Intelligent Automation

Cloud Services

RightAngle

Other CTRM Products

Optimizing Energy Trade Efficiency

Achieving a 60% Margin Management with Enhanced Liquidity

Operational Enhancement

A financial commodity trading firm faced a significant challenge with managing collateral margin requirements when clearing positions through brokers. Fluctuating margin requirements, ranging from 3-12% of a position’s notional value, were driven by market volatility, making liquidity management difficult. Low interest rates on margin balances meant that excess capital tied up in margin accounts was not being optimized. Moreover, the firm was using manual processes to reconcile broker statements, which delayed operations and increased the risk of errors.

The firm required an automated solution that would not only streamline margin calculation and reconciliation but also improve liquidity planning by providing real-time visibility into current and future margin requirements.
Enhancing Endur ETRM Performance: A Value Creed Success Story

KEY RESULTS

50%

Reduction in Manual Effort

Automated margin calculations provided real-time updates on margin requirements, reducing the manual workload.

60%

Faster Reconciliation

Automated the matching of CTRM positions with broker statements, significantly cutting reconciliation time.

20%

Increase in Cash Flow Availability

Improved liquidity management through better margin forecasting and cash optimization.

40%

Improved Decision-Making

Real-time visibility into margin fluctuations enabled quicker decision-making with quicker response to margin calls.

A Strategic Approach to Project Success

To resolve these operational challenges, Value Creed designed and implemented a strategic solution leveraging its industry expertise in trading and risk management. The approach focused on automating key processes and integrating advanced tools for margin calculation and reconciliation to enhance liquidity management.

Expertise on Demand

User Interviews and Needs Analysis
The project started with an in-depth analysis of the firm’s existing workflows. We interviewed key stakeholders across the trading, middle office, and back-office teams to understand their challenges in managing margin requirements. This analysis revealed inefficiencies in their manual margin reconciliation process and a lack of visibility into future margin requirements. Leveraging our expertise, we recommended automating margin calculations and integrating reconciliation tools to streamline their operations and improve decision-making around cash management.
Automation and CME SPAN Calculator Integration
We integrated the firm’s CTRM system with the CME SPAN (Standard Portfolio Analysis of Risk) Calculator, automating the calculation of both initial and maintenance margins. This integration reduced the manual workload and ensured real-time updates as market conditions changed, providing enhanced visibility into margin requirements. As a result, the firm could forecast liquidity needs more accurately, ensuring that excess cash was not unnecessarily tied up in margin accounts.
Reconciliation Process Improvement
To further enhance operational efficiency, Value Creed automated the download and reconciliation of clearing broker statements with the firm’s CTRM positions, eliminating the manual process of matching margin calculations with broker statements. This automation reduced the time and effort required for reconciliation while increasing accuracy, allowing the firm to respond more quickly to margin requests, avoid discrepancies, and resolve any disputes with brokers in a timely manner.
Iterative Testing and Feedback
Throughout the implementation process, we employed an iterative approach, testing the solution in a controlled environment and applying it to actual trades, which allowed the firm to visualize how margin calculations and reconciliations would function in real-time while providing valuable feedback for further refinement. Each iteration of the solution was adjusted to align with the firm’s specific trading activities, ensuring that the system was tailored to meet both operational and strategic goals.

Value Creed Services Mobilized

Expertise on demand

Expertise on Demand

Unlock operational efficiency and reliability with Value Creed’s services. Optimize performance with fast, accurate data extraction, reconciliation, calculation, and reporting.

Key Takeaways

Value Creed’s expertise in automating commodity trading processes and optimizing liquidity management allowed the firm to reduce manual workloads, improve operational efficiency, and unlock valuable insights into margin requirements. Our integrated solution, combined with iterative feedback and stakeholder alignment, ensured that the firm was able to optimize its margin management and respond to market changes more effectively.

Recommended Resources

Ready to get started?

Explore our suite of solutions designed to empower your trading and risk management functions. Partner with us for a transformative CTRM experience that drives success in today’s ever-evolving markets.