Optimize is part of a suite of Risk Reduction Services offered by your Tradition Broker. It aims to reduce outstanding fixing risk in your derivative portfolios and has been developed using the most up to date optimization techniques.
On a frequent schedule we will run a session (also called Round) aiming to target a particular currency IRS. We will disseminate mid-market prices and collect information from all our clients. Advanced optimization techniques are applied so that a fair set of results that respect all client criteria is created. After completing a session each client can receive a set of multi-lateral trades that are market neutral.
The system is designed to be fast and easy to use. The main steps in the session are shown below.
Spreadsheets containing midpoint prices sent to clients
Clients fill in interests and submits back before a cut-off time
The Spreadsheets are processed. and an algorithm is run to find the optimal solution
Trade results & confirmations are sent back to the clients
10:30 AM2:30 PM
Clients will be notified about the cut-off time after which no further submissions will be accepted and the times listed above are just for illustrative purposes.
Further resultant trade details
- The set of trades will be sent electronically via Markitwire (or equivalent service if agreed in advance with all clients) and are dependent on the correct addressing information as supplied by participants in advance.
- The set of trades must comply with regulatory rules of the arranging Tradition entity(s) and cannot be responsible for the regulatory requirements of the clients themselves directly
- The set of trades for each client will be sent in a spreadsheet form for notification purposes after the Round has completed.
- The set of trades from an Optimize session are optimized for all participants as a whole not individual ones and that may result in some or all positions entered not fully trading or trading at all.
- Participants of the Optimize service must be existing on-boarded clients of a Tradition Broking Entity.
- The Optimize service is not intended as a trading service for clients to take a view on market direction but is built to be a risk mitigation service to help clients manage their portfolio risks.
- All the information submitted by the client is private and confidential and will not be shared with any other participants or any other part of the Tradition Group unless asked specifically for or agreed to specifically in advance by the client.
- The Optimize service is offered on a flexible calendar and a Round is open to participation for an extended duration of time such that no resultant trades that are identified by the service should be considered as price forming; nor should the service be considered a benchmark of any kind.
- The Optimize service will work with best endeavours to resolve any issues caused by incorrect information passed by the clients but cannot be held responsible for the result of any such inaccuracy.