Trade Operations

Published on April 29, 2020 by Entrima

Typical commodity & energy trade operations are quite diverse. It includes the following:

  • Deal confirmation process
    • Confirmations control
      • Transactions must be confirmed by the trader to his colleagues in the back office, as well as by the counterparty; once these match, the deal is firm.
  • Matching of orders
  • Billing, invoicing & messaging
  • Cash transferring
    • Transfers because of amounts receivable or payable.
      • Due to payments of invoices and settlement processes.
    • Transfers because of cash collateral deposits and withdrawals.
      • Margining due to clearing.
  • Settlement
    • Payments
    • Delivery
      • Contracts must be unwinded. This typically involves delivery versus payment. Settlement of agreements could involve obligations or the execution of rights.
  • Events processing
    • All kinds of events can take place which lead to the desire or need to adjust positions and the related valuation.
  • Nomination
    • Utilisation of transport capacity must be nominated to the operator, including the use of gas pipelines, power grids, oil tankers and vessels to ship coal, metals or soft commodities.
  • Allocation & reconciliation.
  • Accounting
    • Financial reporting;
    • Regulatory reporting;
    • Monitoring of hedge documentation;
    • Review of ongoing hedge effectiveness.