If you've ever worked on a commodity desk you'll instantly recognise the problem of needing everyone to look at the same marks, with the added twist that multiple people want to update those marks when they receive new market information. In this post we cover the current landscape for this and why CT Grid is a unique solution to this problem.
Synchronising curves is especially challenging for desks spread across the globe with a large number of manual marks to manage. The solution seems obvious:
"Try Google Sheets"
"Use Office 365"
"Shout the numbers down!"
For anyone that's tried to do just that, you'll feel the pain in reading these words. In all likelihood you've already tried to bend Excel to your will and found that in this particular case Excel doesn't want to bend. So as problem solvers do, they problem solve, and in some inventive ways. Here are just a few examples:
Every desk comes up with a solution that works for them and in every case, compromises have to be made, manual steps are involved, and undetected mistakes are rife. Other considerations come into play: historical marks, analysis and charting, keeping the risk department in the loop, generating reports, etc.
This is a big enough problem that a non-insignificant amount is directly (and indirectly) spent on this every year by commodity broking and trading shops. Custom in-house solutions are expensive to build, roll-out, and support. Adoption of these systems is another challenge. Trading in the power and convenience of Excel for an internal system which introduces limitations that easily out way the benefits it brings is a hard sell. The lucky few that have something that works have gotten there through a lot of trial and error, and some serious investment.
Excel is surprisingly good at "real-time data" when what you want to do is receive data. The RTD function is designed specifically for this, and is in fact the way most Excel data feeds from exchanges and large data vendors work. Things stop looking good when you're trying to make Excel go the other way. Maybe it isn’t that tragic if you don't care about performance, and your work is limited to some accounting tables. But most do care and have Excel sheets that are far busier than a simple P&L table which is updated every now and then. Performance becomes a real concern with the volume of data that is passing around to price up those curves.
There are off-the-shelf solutions out there that can address these problems, and they bring their own level of complexity, performance concerns, and integration challenges. None are ready to use out of the box. None are designed specifically for the commodity broker and trader. None give you an API with well formatted data.
COVID-19 has changed how the desk operates and working from home is the new normal. This only increases the challenges involved in staying in sync - before it was contained to the office, now you could find yourself working from almost anywhere.
Distance from your colleagues adds a fog-of-war over your communications. The impromptu chat, bumping into eachother in the office, or simply shouting across the desk at just the right time, all these mini-events lead to better response times, and better decision making, more urgency. It's incredibly difficult to capture and replicate this using remote working tools, and it's incredibly easy to become an island when you're not sitting next to your colleagues.
It's not all doom and gloom. Most firms have dealt with this challenge admirably, with soft-turrets (and all that this brings; crying babies, barking dogs, etc), shared folders, and Zoom calls. Data sharing is still an open problem for most, and for this reason we've seen an uptick in sign-ups for CT Grid since COVID hit. Desks have gotten into a new rhythm, new habits, and new ways of communicating. It's interesting to see what changes become more permanent once the dust settles.
CT Grid was built specifically to address these problems in a simple and transparent way, and it's perfectly situated to deal with the new normal. There's no change to the desk's workflow; you can keep that Excel file you've been crafting over the years. You can build a real-time history of your curves and marks and your data team can grab this newely digitised desk data via the API. Your risk team can track how your positions are doing in real-time, and your colleagues in your global offices have a smoother handover. When fully utilised, CT Grid becomes a power tool for your desk and data team.
Trying to digitise your front-office? Get in touch!