Risk Management

No matter what your risk management strategy is, you need to have strategic control through operational execution of your business.

With Future and Option Contracts, you never have an open position without knowing and hedging it. You can also allocate forward contracts to physical exposure. The price can be fixed on an exchange or average value, and you can easily copy, roll, or settle contracts.

With Foreign Exchange Contracts, you can register foreign exchange deals with banks, brokers, and more. You can use FX rates for item value and invoice posting. You can also register or import the latest exchange rates, allocate FX deals to physical deals or taxes due, and manage exposure in detail or lump sum.

Mark -2-Market reporting gives you a near realtime overview of all your positions, cross-product. Where are you under- or overhedged? What risks are you running on a market moving in another direction than your traders anticipated? Not only your own management team should live by this data, also your capital providers and credit line holders are keen on these reports.
By quantifying potential portfolio losses over a specified period with a given confidence level, you identify your exposure to market volatility. This helps your traders to set risk limits and make informed decisions.

VaR ensures regulatory compliance by providing standardized risk metrics. It aids in optimal capital allocation, strategic planning, and performance evaluation by assessing risk-adjusted returns. Additionally, VaR builds investor confidence and acts as an early warning system, highlighting vulnerabilities and guiding preemptive risk mitigation. Overall, VaR reporting is essential for effective risk management and sustaining profitability in volatile commodity markets.

Keep your eye on our Linkedin posts; in upcoming releases DycoTrade will add advanced functionality such as Monte Carlo analyses!