Hedge funds are opportunistic by nature, jumping into trades whenever and wherever opportunity presents itself. When trading strategies include derivatives, hedge funds must be able to accurately price and manage the risk of the derivatives, and must do so very quickly before the opportunity disappears. However many hedge funds have very small quant teams and/or inflexible trading and risk systems, which can be problematic when traders want to trade new derivative types.
Numerix provides Hedge Funds with the tools and services they need to take advantage of new trading opportunities, by providing flexible and accurate derivative analytics which enable the rapid structuring, pricing, and risk management of any derivative. Using market proven, industry standard pricing models, Hedge Funds can deal with derivatives of any complexity across any asset class, while minimizing the quant research and software development resources needed so those staff can avoid building models from scratch and instead focus on other value-added activities.
|•||Accurately price any derivative, from vanillas to exotics across all asset classes, utilizing any model from the industry’s most comprehensive model library||•||Rapidly structure new derivative types using an infinitely flexible deal-structuring architecture which includes a payoff scripting language|
|•||Calculate risk sensitivities/Greeks and manage market risk via scenarios/stress tests, VaR and expected shortfall analysis||•||Perform initial margin or collateral calculations during pre-trade counterparty discussions or post-trade validations, to optimize counterparty choices and reduce disputes|
|•||Produce post-trade valuations for fund NAVs and client reporting, and/or obtain independent valuations to validate NAVs||•||Gain credibility with investors, who demand the use of market leading technology like Numerix’s in pricing and risk infrastructure|
|•||Integrate market-standard derivative pricing and risk analytics into proprietary applications, to create bespoke analysis customized to a fund’s trading and risk strategies||•||Perform strategy analysis and back-testing, as well as model comparisons to choose best pricing model|