Loqsea Looks to Redefine Real-Time Risk Management in Commodities
Last week, I had a briefing and demonstration from Loqsea who have a mission to “redefine real-time risk management and automated trading for commodity and derivatives markets,” with its cloud-based platform for commodity trading and risk management. Essentially, Loqsea specializes in real-time risk management using automated trade ingestion, reconciliation, analytics and reports, and covers commodity derivatives primarily. To be fair, its coverage is already pretty good with ICE, CME, COMEX, NYMEX, CBOT and LME for futures and oil swaps and base metals, oil and products, grains and softs and FX market coverage. It offers a risk manager tool and an execution engine that allows auto trading and is working on a price discovery tool for 2025 launch.
Its risk manager product integrates into exchanges and brokers – even voice trades – and automatically ingests trades. It also features real-time updating into the dashboards that are all customizable and feature easy drill-down functionality as well. It also features a deal blotter if trades need to get into the platform manually. This sort of tool is good for reconciling trades with exchanges and brokers as well as monitoring position in real-time. For hedge funds and managed accounts, it also features allocation making it attractive to funds.
“It’s very easy to set up new connections for ingestion,” I was told. However, Loqsea does this for the users as necessary. It also features VaR (180-day covariance) and is “looking to allow users to add their own VaR models in the future.” The platform could also be used to perform risk aggregation offering everything needed to ingest data from multiple underlying systems to display and monitor aggregated risk. Loqsea describes its software as “a cloud-based risk management platform specifically designed for commodity and derivatives traders who need a real-time, agile solution. Unlike traditional tools, Loqsea provides live updates on positions, profit and loss, and market exposure, empowering teams to make swift, data-driven decisions with confidence.”
The tool looks easy to use and provides users real-time position, PnL, analytics and more. Interestingly, ComTech is seeing increasing numbers of platforms like this coming to market to serve a growing need for better and more up to the minute risk management that is often not provided by CTRM solutions. And this is why risk aggregation is also emerging as a software category as often users need to bring in data from a variety of underlying platforms to gain access to an enterprise-wide view of risk.
Loqsea has a dozen or more clients in the USA, UK and Dubai using its software and sees significant opportunities in the market to grow. Market conditions with an increasing emphasis on risk management suggest it has every chance of success.
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