Satyam Kancharla & James Jockle from Numerix focus on how derivatives markets can cope with market volatility via a more holistic view of risk.
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Satyam Kancharla, executive vice president & chief product officer at Numerix
Participants in derivatives trading markets are coping with the need for speed driven via two very challenging trends – market volatility and the need for a pre-and post-trade holistic view of risk management for each transaction.
Both situations are compelling firms to look to cloud computing, data science, artificial intelligence (AI), and other cutting-edge technologies in an effort to keep up with the competition, say Satyam Kancharla, executive vice president and chief product officer for Numerix; and James Jockle, executive vice president and chief marketing officer for Numerix. They recently took part in an FTF Exchange podcast.
The market volatility is forcing firms to calculate risk in seconds and minutes rather than days.
James Jockle, executive vice president & CMO at Numerix
“If you think of where the markets are as far as volatility and all the uncertainty in the markets, that type of volatility underscores the need for just-in time information,” Jockle says.
Monte Carlo calculations have to be launched as decisions are being made in response to market moves.
At the same time, holistic risk analysis — also in real time — has become standard.
“That’s driving the need across the board from the most sophisticated institutions all the way down to the smaller institutions to have … a sense of your exposure pre- and post-trade,” Kancharla says. “These decisions need to be made quickly … positions need to be entered into quickly. So, we see the need for stress testing and applying various steps of scenario analysis on portfolio holdings often in the context of … trading activity actually happening. So the need for speed is there and it’s accelerating by the minute.
The podcast also covers:
- IT Disruptions: emerging technologies that facilitate comprehensive real-time pricing and risk analytics?
- Applying the Technology: Disruptive technologies that are catching fire with hedge funds
- Cloud Native & More: Do firms fully understand this widely used label for next-generation cloud computing?
Numerix is a financial technology provider that develops multi-asset-class analytics and scalable software for risk management, trading, valuations, and pricing for sell-side and buy-side firms. The Numerix Oneview offering won the 2022 FTF Award for Best Cloud Adapted Solution Provider.
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