TRM

What are derivatives?

Derivatives are financial instruments that derive value from an underlying asset. The underlying asset can be equity, fixed income security, currency or commodity. There are different types of derivatives including forwards, futures, options, swaps and warrants. Forwards refers to contracts between two parties over-the-counter wherein there is no exchange insurance. Futures are a contract to exchange obligations on a future date. Options are one category of derivatives and give the holder the right, but not the obligation to buy or sell the underlying asset. Swaps are customized contracts traded in the over-the-counter (OTC) market privately. Longer-dated options are called warrants and are generally traded over-the-counter.

KNOW MORE


What are the types of commodity risk?

Commodity risk refers to the uncertainties of future market values and of the size of the future income which is caused by the fluctuation in the prices of commodities.

KNOW MORE


What is hedge accounting?

Hedge accounting refers to a method of accounting where entries to adjust the fair value of a security and its opposing hedge are treated the same. Hedge accounting helps reduce volatility created by repeated adjustment to a financial instrument's value, known as fair value accounting or mark-to-market.

KNOW MORE


What is P&L management?

P&L management refers to how a company handles its P&L statement through revenue and cost management. A healthy, growing business requires accurate management of profits and losses. Strategic P&L management guided by a detailed income statement helps a business in keeping their earnings positive and minimize expenses.

KNOW MORE


What is commodity hedging?

Hedging refers to a strategy of reducing risk exposure. This is done by taking an offsetting position in a closely related product or security. Hedging against investment risk means strategically using derivatives to offset the risk of any adverse price movements.

KNOW MORE


What is CTRM and ETRM?

CTRM stands for Commodity Trading and Risk Management and ETRM stands for Energy Trade and Risk Management. CTRM software is a specialized trading and risk management software created for commodity trading businesses whereas ETRM focuses on the needs of niche energy trading businesses. Both CTRM and ETRM solutions provide advanced and sophisticated software that allows firms to manage critical business processes involved in trading commodities by capturing data related to accounting, contract management, operations, logistics, inventory management, order processing, regulatory tax reporting and more.

KNOW MORE