Energy Trading Workbench

“an example of how a smaller dev team of highly skilled people can achieve more than other much larger teams”

Senior client

When this client described to us a challenge common to many companies and organisations (particularly those trading in markets), it was quickly established that HTI Labs were the people to help.

The Challenge

  • Substantial technical change was already in progress:
    • A large programme was underway to improve quality and frequency of front-office risk calculations
    • The programme did not focus on trading or front-office tools that could benefit a great deal from integration with the revised front-office architecture
  • Business users demanded data and analytics in spreadsheets:
    • A number of key users were very clear on their requirement for the data to be made available in Excel
    • They were interested in evolving intra-day functionality themselves in a familiar environment
  • Concern at lack of ability to ‘control’ spreadsheets:
    • Users were demanding and unilaterally implementing ad hoc development processes in Excel
    • IT and managers were worried about logic that was not monitored or controlled and not shared between users when mature
  • Strong existing culture of spreadsheet usage:
    • A substantial number of sheets contained logic that needed to be maintained or revised
    • Some existing spreadsheets had severe performance issues and could not be shared between users

HTI Labs' Involvement

Based on HTI Labs' experience in creating enterprise-quality spreadsheet solutions, the client asked us to work with them to define the architecture, governance and solutions that would solve their challenge.

HTI Labs developed the initial architecture and defined the responsibilities for the work. They quickly moved on to creating an integrated solution that leveraged the risk programme's new architecture alongside new financial models, users' existing sheets and the initial requirements.

Extensive functional coverage has been achieved and continues to grow as the programme continues.

The decision to use Schematiq

The client asked us to develop a Proof of Concept (POC) with them to validate that Schematiq met their requirements. Specifically, they wanted to be assured that Schematiq:

  • Would allow solutions to be delivered quicker than something developed in-house
  • Was appropriately priced and would allow a convincing business case to be produced
  • Was stable and did not require support
  • Was fully compatible with their Excel environments
  • Could access required data sources such as Endur
  • Could be extended by HTI Labs, in-house developers or other IT staff
  • Was intuitive for users, allowing them to extend and improve their spreadsheets.

Schematiq passed all the tests and its use was supported by business users, "quants" and the IT team.

Results so far

It was decided to roll out Schematiq to a handful of users. The benefits were quickly realised, so a second tranche of users was then furnished with the software.

The solution covers a wide range of products:

  • Options
  • Structured Deals
  • Linear Hedges.

With wide ranging functionality:

  • Volatility surfaces
  • Trade entry
  • Valuation and pricing
  • Reporting and summarising positions and risk.

Next steps

The client continues to work with HTI Labs and expand the scope of the platform using this successful delivery model. We are currently adding further functionality to the initial solution and are scheduling work on new user solutions for back-end functionality that is expected to be delivered in 2015. We look forward to continuing to work with this client as a trusted partner.

 

If you want to understand more about how our Excel development, risk system development experience and Schematiq software could work for you then please contact us.

Technology used

Writing some notes

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