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Value Creed Optimizes Precious Metals Trading Operations for a Diversified Trading Firm

Performance Challenge

A diversified trading firm with a wide range of trading activities, recognized the growing opportunities in the precious metals market and decided to establish a precious metals trading desk. This expansion posed significant operational challenges. They faced challenges due to substantial daily trade volume, intricate storage fee management, and the need for efficient exit position creation. To address the challenges faced by this client, we provided assistance in the design and optimization of their precious metals trading operations.  We achieved this by introducing modifications to their front office processes and implementing user friendly solutions aimed at effectively managing their trading volumes

KEY RESULTS

Real-time Insights into trading decisions

Reduced Operational Risks

Enhanced Efficiency in trading processes

Accurate Cost Management 

Business Process Design & Optimization

Some of the updates that we introduced to enhance our client’s effective management of their new metals business:

  • In order to streamline trading processes and enhance the efficiency of trade entry, we designed and implemented a trade uploader tool within the trade entry process. This innovative tool is proficient at handling the high daily trade volume, enabling the firm to seamlessly load over 1000 trades into their existing ETRM system in under a minute.
  • In addressing the intricacies of storage fees, we implemented an advanced storage fee modeling process into their existing ETRM system. This modeling process enabled the firm to accurately monitor and account for storage fees throughout the entire cycle of warrant purchase and sale, ensuring precise cost calculations and maximizing profitability.
  • In order to mitigate the risk associated with manual entry of exit positions for warrants, it was crucial to automate certain process steps. To achieve this, we developed an automated exit position creation system, which substantially reduced the need for manual position entry and minimized the potential for errors when selling warrants. This automation not only improved risk management but also optimized their trading strategies.
  • To effectively identify trading scenarios and conduct pre-trade analysis, the front office team needed real-time visibility into their current positions. To address this need, we introduced a Warrants Inventory Report as an integral input into the pre-trade analysis process. This report offered the firm immediate insights into their open positions, enabling swift decision-making and facilitating Profit and Loss (PnL) calculations. It quickly became an invaluable tool for making informed decisions and optimizing their trading portfolio.

Value Creed Services Mobilized:

Business Process Design & Optimization

Partnering with Value Creed to perform your business process design and optimization tasks gives you a structured approach to current state performance and future state competitive advantage. Tailoring operational flow to your niche will continue to deliver efficiency and profitability dividends over the long term.

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Key Takeaways

In collaboration with Value Creed, the trading firm successfully overcame the challenges associated with establishing a precious metals trading desk. The implementation of streamlined processes, accurate cost modeling, and automation not only improved efficiency but also enhanced risk management and profitability. This case study highlights the value of strategic business process design and optimization in navigating complex financial markets and achieving sustained success. The trading firm’s partnership with Value Creed demonstrates the importance of leveraging expertise to thrive in competitive trading environments.

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