What is CTRM
CTRM (Commodity Trade and Risk Management) is a term used to describe specialized ERP and risk management software for companies involved in commodity trading. It supports commodity traders, processors and buyers in the several business processes that are related to commodity trading. CTRM has different architecture requirements. They are designed to cope with variance. This is because commodities are traded in different markets and currencies while their monetary and trading values differ in dissimilar environments. In essence, it is a dedicated commodity trading and risk management software system that can facilitate business decisions.
CTRM offers users the ability to maximize the value of variances instead of limiting them or forcing employees into regular transactions and processes. CTRM systems essentially replace the spreadsheets and legacy platforms that served business operations in the past before automation and digitization changed the business landscape. They enable the efficient and profitable management of business operations. When well managed, they can serve as the backbone of a commodity trading business. You are most likely to find CTRM in business environments like commodity processors and trading companies.
Benefits of CTRM
Commodity trading is more unpredictable than coastline weather. What with things like political unrest, climate change and fair-weather trade agreements? Let’s put it this way; commodity trading is volatile: trading partners can change just as rapidly as political situations while operational costs change and commodity prices plummet even as profits disappear. Most commodity traders would be frightened of the market, but thankfully, CTRM offers benefits that can avoid and manage such situations.
CTRM is cloud-native, which enables short implementation times without sacrificing functionality. Cloud-native CTRM software can be implemented in half the time that it takes for traditional on-premise systems. The best part is that it delivers the functionality you need for efficiency, insight, and business improvements in no time. This way, you get necessary customization without having to purchase new hardware or lots of work from internal IT teams. The best part is that the interface is straightforward, intuitive and thus easy to use. Users can quickly master the system and make use of most of its features. This rapid implementation enables faster, smarter trading decisions.
Improved data security
CTRM systems offer a level of security that helps trading companies compete better in today’s volatile markets. Since it is a cloud-based system, your data can never get lost. Should one location go down, duplicates of your data can be found on others.
CTRM systems automatically aggregate and analyze data from multiple data sources (structured, historical, and real-time, among other others). Thereby allowing traders to create very accurate insights which reflect on your trading decisions. Here’s how CTRM works on your data. It allows you to analyze the impact of dynamic partners with real-time data. You also get to plan better since you can identify areas of concern and gain a better understanding of your business. This way, you can gain insights faster while eliminating errors in collecting and aggregating data used for data.
Beyond generating better insights, CTRM increases efficiency. No longer does trading companies have to spend resources collecting and aggregating data, CTRM automated systems do this without manual supervision so that valuable time and resources could be put to better use. It allows integration with mobile apps and enhances and extends the functionality and provides greater flexibility. This is achieved by eliminating the need for interfacing with business operations that do not meet the rules, and by supporting quicker updates to accommodate changes in the market. CTRM built for commodity trading and risk management, so it essentially enables traders to manage physical trades, derivative trades, positions, accounting, risk management, origination, mark to market, logistics and planning in real-time and on one system. You get accurate data and timely reports without wasting a minute.
Better risk management
CTRM systems facilitate better risk management by providing a current, exact, and comprehensive view of pricing, market conditions. When analyzed quickly, real-time data ensures that commodity trading companies can manage risks better. It also offers real-time updates of key information such as risk exposure, available credit, position, and profit and loss. All within a few minutes. This way, reports are quickly viewed without sacrificing response time.
CTRM solutions give traders the tools required to stay abreast of the demands of commodity trading. They support forward trading and are designed specifically to help make the front office more financially viable while keeping the back office balanced. Besides, CTRM solutions which are built on a cutting-edge infrastructure to manage every aspect of business enterprises, track forward trading, and improve profits, minus the costs that come with owning and maintaining an in-house commodities trading and risk management platform.
CTRM is also designed to automate the management of various risk types and ensures that your business follows financial regulatory changes to the letter. At the same time, its advanced valuation process delivers time-sensitive business intelligence by sustaining an informed position and Profit and Loss (P&L) statement in the business day. With CTRM, traders can build market-specific products based on futures, swaps, options, and physical commodities. Each of these building blocks has a unique set of settlement and mark-to-market logic. It also allows them to create unique trades for a business.
With access to live data, traders get up-to-the-minute daily, month-to-date, quarterly, year-to-date, and custom views of mark-to-market and risk exposure information at the touch of a button. Also, every time a transaction is made, positions are updated accordingly. Traders get to match a company’s trades to clear bank shadow settlement accounts, thereby ensuring that the middle office is on top of any risk. This is done without much stress. All that is needed is a few clicks.
In the past, commodity traders, risk managers, accountants, schedulers (among many other professionals)relied on what we now view as inefficient systems to help them manage their operations. The demands of today’s business are much more. In recent times, the best way to manage the uncertainties of commodity trading is to use CTRM. We hope you now have a better understanding of CTRM after reading this article.