Software for brokers, markets, and investors
FinanceGear

Risk Management with FinanceGear

FinanceGear is first and foremost a comprehensive risk management product. Features include pre-trade risk management and limits control, exposure analysis, drill-down capabilities, VaR calculation, back testing, scenario evaluation and stress testing.

Pre-Trade Margin-Based Risk Management

FinanceGear supports margin-based pre-trade risk management for both equity and equity derivatives. In a context of straight-through derivatives trading, this capability can effectively eliminate risk for the intermediary.

Sensitivities

FinanceGear computes sensitivities - so-called "greeks" for derivatives; duration, modified duration, and convexity for fixed income products. All sensitivities can be expressed in various units and visualized graphically.

Scenario Analysis and Stress Testing

FinanceGear's simulation capabilities make it possible to study the effect of virtually any scenario. This makes it possible to plot payoff profiles for complex portfolios or analyse PnL scenarios using a risk matrix.

Using a scenario editor, it is possible to create named scenarios (e.g. "October 1987 crash") and stress test your portfolios given the scenario.

Value at Risk and Back Testing

FinanceGear computes VaR (Value at Risk) using either the variance/covariance method, or Monte Carlo simulation.

In both cases, FinanceGear assigns the user an active role by allowing to define relevant risk factors and their correlations - along with tools to estimate these variables.

A back testing tool allows to measure the effectiveness of VaR by comparing historical performance with historical VaR.