Understanding Daily P&L Bucketing
RightAngle features an out-of-box Mark to Market report, which provides the profit & loss for active trades in the system. Risk analysts and Front office analysts monitor their book P&Ls from the data extracted from the report. The change in Daily P&L may be due to new trades, modified trades, canceled trades, new costs, Curve shifts, or some other actions in the system. Identifying the reason for the P&L shift or change is difficult in the Mark to Market report. Hence, the analysts spend a lot of time categorizing the data and reporting it to Stakeholders.
Daily P&L Bucketing Report will extract Risk transactional data from End of Day runs and apply the different business rules, to bucket the change P&L into different categories like New Trade, Modified Trade, Cancelled Trade, Curve Shift, Costs, etc. This custom report provides all of this information in one place, enabling risk analysts to quickly identify the reason for the P&L shift or change in a particular strategy and save time.
Customizations, Flexible, and User experience-focused
User-friendly interface & Streamlined workflow
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Challenges in the Current Process
The changes in Daily PnL may be due to new trades, modified trades, canceled trades, new costs, Curve shifts, or due to some other actions in the system. Risk analysts follow the below process to identify the reason for the PnL shift or change that is not possible in the Mark to Market report.
- Risk analysts review the Mark to Market report daily post-EOD run, to check changes in daily P/L based on different strategies in RightAngle.
- This process can take hours depending on the number of records in the MtM report.
- Analysts must reach out to traders or schedulers to understand changes at the deal level for each strategy used.
Evaluating the Business Impact Of The Current Process
Let’s assume the mark-to-market (MTM) report has 20,000 records per day. It takes around 2 hours for the risk analyst to review the MTM report and analyze the daily P/L changes for different strategies.
TIME
RESOURCE MANAGEMENT
COST
Value Creed’s Custom-Built Approach
Value Creed’s services are tailored to the client’s specific needs and are focused on delivering a customized, high-quality solution for managing daily PnLs in RightAngle.
Tailored to your Needs
Identify clients’ problems and develop a project plan for the development of the custom tool.
Provide our technical expertise and guidance in designing and implementing the custom tool.
Develop and test the custom tool in accordance with the client’s requirements and specifications.
Manage the project from start to finish, ensuring that it is delivered on time, within budget, and to the client’s satisfaction.
Provide ongoing support and maintenance for the custom tool, ensuring that it continues to meet the client’s needs and requirements over time.
Benefits Value Creed can Help you Achieve
With the automated report, the time required for the risk analyst to check the daily P/L changes could be reduced from 2 hours to 30 minutes, resulting in a time savings of 90 minutes per day.
The automated report could reduce the potential for manual errors. Assuming a 10% reduction in errors, this could translate to a reduction of $10,000 per year in losses from errors.
Timely information to traders and schedulers about the P/L changes, potentially enabling them to make faster and more informed decisions. Assuming a 5% improvement in decision-making, this could translate to increased profits of $50,000 per year.
Improved insights and recommendations, leading to better risk management and profitability due to a better focus on analysis rather than manual data entry and collation
With the availability of a consolidated report highlighting the reasons behind P/L changes, risk analysts can better communicate with stakeholders and provide them with more detailed explanations, leading to better collaboration.
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