SunGard today announced that Próxima Alfa Investments (USA) LLC, a cross-commodity hedge fund, will extend its use of SunGard's Kiodex by implementing the solution's expanded functionality for the London Metals Exchange (LME).
Kiodex Risk Workbench is a Web-based commodities risk management solution that integrates deal capture, valuation models, risk measurement, financial reporting, and independent market data. The market data includes representative prices, volatilities, volatility skews and correlations across the spectrum of commodity.
Enhanced functionality for LME products further expands Kiodex's cross-commodity capability. In addition to base metals and plastics, Kiodex supports power, gas, oil, precious metals, agricultural products, coal, freight, emissions/carbon trading, weather derivatives, and alternative energy. The new functionality in Kiodex handles the distinct attributes of LME metals, including atypical discounting on exchange-traded instruments as well as daily contracts with unique expiration and settlement characteristics. As these daily contracts also lead to high volumes of trades, the enhancements in Kiodex include single-click option exercise features to help customers save time and reduce the chance of error. In addition to correctly handling the spectrum of LME instruments within existing results and reports, Kiodex has added specific LME position reports to help traders and risk managers to properly manage LME exposure.
Kiodex is offered on a Software-as-a-Service (SaaS) basis, providing commodity trading and hedging desks with independent valuation, risk sensitivity and VaR, as well as the requisite underlying reference and market data to help support internal management and investor needs. As with other asset classes, Kiodex centrally maintains LME forward curves, volatility surfaces and official settlement prices and also provides the ability for customers to maintain their own datasets within Kiodex.
Carlos Rey-Martín, managing director at Próxima Alfa Investments (USA) LLC, said, "We use the Kiodex Risk Workbench to provide an independent and accurate source of risk and valuation across the commodities we trade. We are never complacent abouteent about our risk practice, and are pleased to leverage the expanded cross-commodity coverage in Kiodex for all of our LME trades, including LME daily trades. Kiodex provides the ability for us to handle the distinctive attributes of LME pricing and settlement and the current unique conventions across LME trading."
Dr. Richard Boesch, senior vice president of financial engineering and product development for SunGard's Kiodex business unit, said, "As some of the highest volume traders on LME became our customers, they suggested enhancements we could make to Kiodex to help them meet their LME specialist needs in a streamlined fashion. We leveraged the expertise of those customers in creating the expanded LME functionality - for example, we added an efficient display of net positions with the specific views an LME trader expects. Now customers no longer need to choose between an LME base metals system and a broad-based, cross-commodity system - the Kiodex SaaS provides LME specialist tools within our cross-commodity risk and valuation solution."