Masters of Risk Management

It would be amiss for us to look at the events of the past few weeks in the commodities and broader financial markets and not draw parallels to last weekend’s Masters Tournament, one of the most iconic sports tournaments, where risks lurk at every corner.

While feel and instinct are important attributes to excel in commodities trading market as well as in golf, managing risk utilizing data is equally important whether one is navigating through Market Risk, Operational Risk, Credit Risk and even Reputational Risk or navigating doglegs, sand traps, Rae’s Creek or other water hazards on the golf course.

Whether it is knowing the exact yardage or future prices, wind direction or speed, a miscalculation of risk could make your shot land in water or in the case of a recent vessel’s misfortune, grind sideways in the Suez Canal. In either case, access to current market conditions and its impact on potential risks is required. The key is using all variables on a golf course or using Simulations and Stress Testing beyond flat shocks, more targeted seasonal shocks and taking every parameter into consideration, VaR or other Risk Analytics. CTRMs are the ‘green books’ of commodity trading. They provide valuable information on course/risk management and insights into risk mitigation.

Speed and agility of the availability of the data is equally important. In golf, it may be 40 seconds between shots, but in commodity trading every second counts. Near real-time processing of inputs and availability of resultant data makes the utmost difference and an E/CTRM solution born on the cloud provides that edge.

The difference between the tee shot on 16th hole at Masters in the pond and slipping on the green jacket.

P.S. Congratulations to Hideki Matsuyama on winning the Masters!

CTRMCloud allows for data to be collected, analyzed and reported in near real time from all areas of the business. Contact us to learn more.

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