Automated hedging solution in currencies/commodities
Budget: €30 – €250 EUR
Treasury division of companies deal with currency risk when they have frequent payables/receivables in currencies other than home currency.
This currency risk can be neutralised partially or fully by hedging on the futures market.
i.e. taking a specific set of trades in the futures and options market.
The aim is to automate this part of treasury function and build a solution that would enable the company hedge and track the hedges throughout the trade life cycle.
The software solution should integrate with client’s ERP to collect & calculate the net exposure and have API connectivity with a currency exchange approved digital broker for executing the hedges.
Deliverables
*A form that takes inputs to help CFO draft / list the hedging policy.
Integrate with Invoicing & Procurement modules of the company’s ERP
Reads the time line of exposure( Payable date/ Receivable dates )
Calculate the week-wise net exposure ( total payables minus total receivables)
Suggest the combination of Futures & Options trades that can be taken on the exchange to hedge the underlying exposure according to the hedging policy set by the user (i.e CFO’s office) .
[ We have a scenario based rule engine that must be embedded. The software should check back with this rule engine to suggest the combination of trades ]
Once the user gives approval for a particular hedging strategy amongst the choices presented, the software should communicate with the exchange approved broker systems through API’s and execute the scheduled trades on the timeline every day. (Entry and square off transactions)
( A set of instructions that includes the parameters such as buy, sell, quantity , time to enter and exit the trade must be communicated to broker systems and the positions monitored till the exit of
( To square off a long futures position, you take a short futures position of the exact amount and vice-versa)
The software solution will keep track of the Mark to Market(M2M) exposures and suggest the user to recharge the account with additional margins in case of a margin call.
( date when the payable is debited or receivable is credited into the account )
Visualisation Dashboards to help the treasury team understand the impact of their hedging transactions .
This currency risk can be neutralised partially or fully by hedging on the futures market.
i.e. taking a specific set of trades in the futures and options market.
The aim is to automate this part of treasury function and build a solution that would enable the company hedge and track the hedges throughout the trade life cycle.
The software solution should integrate with client’s ERP to collect & calculate the net exposure and have API connectivity with a currency exchange approved digital broker for executing the hedges.
Deliverables
*A form that takes inputs to help CFO draft / list the hedging policy.
Integrate with Invoicing & Procurement modules of the company’s ERP
Reads the time line of exposure( Payable date/ Receivable dates )
Calculate the week-wise net exposure ( total payables minus total receivables)
Suggest the combination of Futures & Options trades that can be taken on the exchange to hedge the underlying exposure according to the hedging policy set by the user (i.e CFO’s office) .
[ We have a scenario based rule engine that must be embedded. The software should check back with this rule engine to suggest the combination of trades ]
Once the user gives approval for a particular hedging strategy amongst the choices presented, the software should communicate with the exchange approved broker systems through API’s and execute the scheduled trades on the timeline every day. (Entry and square off transactions)
( A set of instructions that includes the parameters such as buy, sell, quantity , time to enter and exit the trade must be communicated to broker systems and the positions monitored till the exit of
( To square off a long futures position, you take a short futures position of the exact amount and vice-versa)
The software solution will keep track of the Mark to Market(M2M) exposures and suggest the user to recharge the account with additional margins in case of a margin call.
( date when the payable is debited or receivable is credited into the account )
Visualisation Dashboards to help the treasury team understand the impact of their hedging transactions .