Trading & sales
OTC trading and sales on the same technology stack.
The OTC Platform supports over-the-counter trading and sales with the Framesoft N-tier stack, document generation and workflow already used for contracts and structured products. Framesoft Contract Repository (FCR), Framesoft Confirmation Generator (FCG) and Framesoft OTC Platform (FOP) are covered below.
Benefits
- Structuring, simulation and sales workflows
- Two-way link to the trading system
- Free-format term sheets, including negotiation
- Master-agreement check against FCR
- Four-eye approval and a full audit trail
Sales connected to documentation
Growing volumes and more complex structures put pressure on derivatives sales. FOP supports the day-to-day work of sales and trading: structuring, simulating and selling OTC derivatives, with every step of the sales cycle recorded electronically. OTC activity that cannot produce a confirmation or feed a contract record creates operational risk. FOP sits with FCG and FCR rather than as an isolated blotter. It checks the central customer database and FCR to see whether a master agreement is in place for that customer.
From quote to risk system
Quote requests can vary market or instrument parameters, and simulations can optimize toward a target value. A two-way interface carries price requests, simulations and trades to the trading system without re-keying. Pre-configured structures can be captured, and new structures can be designed and handed to sales, trading or financial engineering. A free-format term sheet covers creation and negotiation of exotic, new or rarely traded structures. Open quotes are tracked so sales can follow up. Trade results go to the risk system and the customer database. Multi-product trades can be split into multi-counterparty transactions at capture. A 2D and 3D engine analyses option sensitivities, and a pay-off analyzer shows how structure parameters change the pay-off of exotic and multi-product trades. Indicative prices come from the risk-system engine or from a pricing engine in FOP. Simulations export to Office for a customer offering. Trade modes include Good Till, Live Quote, Intraday Forwards, Limit Quote and Best Effort Quote. Each stage can require four-eye approval. Field-level security can restrict, for example, the sales quoted price to Sales. Reporting runs in FOP and in Framesoft Data Insight.