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Commodity Trade Too Versatile to Automate?

The only thing that is certain in commodity trade is change. Change is the one constant whether that change is due to regulation, taking advantage of new trading opportunities, external events that impact everyone; such as the exit of a trader from the market for example or, the introduction of new instruments and markets, just to name a few. In the book, Trends in Energy Trading and Risk Management Software – A Primer by Vasey & Reames (2010), industry change and its impacts on the development of ETRM (and by default – CTRM) software is discussed at length. Vendors and software products rose and fell through these industry changes or ‘dislocation events’, as the authors term them. The evolution of the entire software category has been related to the rapid and often abrupt changes in our industry they argue.


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Macro-level industry changes are one issue but another is that no two commodity trading firms are identical in terms of their business strategy, industry segment(s), commodities traded, risk appetite, trading partners, business processes, assets employed, reporting needs and so on. At a high-level, we can all talk of front office, middle office etc. and understand each other but when we drill down into these business areas to some level of detail, things can be dramatically different. The devil is indeed in the details. As a result, industry analysts will advise that any packaged software solution is only going to meet 70-80% of the business requirements at best.


These two issues have made Commodity Trade and Risk Management (CTRM) software quite complex and functionally rich. By necessity, the software is usually designed to be flexible, configurable and personalizable so that, rather than hard coding everything and being very inflexible as a result, the software can be utilized with minimal re-coding by a wider range of trading businesses. Where does this end? Well, often, the more configurable and flexible the software becomes the more complex it can feel to the end user.


Of course, these days modern technologies and architectures can help vendors develop much more configurability without so much complexity. What where rather intractable problems in client/server land are much more easily resolved with service oriented architectures and through the use of things like xml services. A general example of this would be something like the low cost air ticket web sites that, with relative ease, can scan a large number of prices across a number of other websites to present you with the cheapest deal.


Agiblocks is built using these types of modern technologies. Agiboo has experienced the pain of trying to implement overly complex CTRM solutions for its clients in the past. It has understood where the issues lie, observed where improvements in design might be made and it has applied this expertise and experience in bringing the market Agiblocks – a more flexible solution packed with functionality that is easy to use and easy to configure for your business.


Is Commodity Trade and Risk Management too versatile to automate with CTRM?

In most instances, no. Good software design, the right development tools and practical experience of implementing a range of software solutions has demonstrated to us that packaged CTRM software can be both flexible and configurable as well as relatively easy to install and use. Don’t believe us? Take a look at this video or take us up on our offer of a hand on demonstration: Agiblocks Interactive