Three Reasons Why Real-Time Risk Analytics Are Important

 

#1 Real-Time Risk Analytics Bridge the Gap Created By Bad Data and Poor Liquidity

Here’s a fact: Real-time risk analytics are essential. In market conditions where liquidity is spotty, it is essential to have accurate, real-time, adaptive theoretical prices and risk metrics to fill the data gaps and separate the bad data from the good.

 

#2 Real-Time Margin Calculations Prevent an End of Day Surprise

Margin is a real cash flow that needs to be monitored and managed throughout the day. Calculating intraday margin using real-time position information but prior-day clearinghouse risk files – as is often done in practice – is prone to substantial error, especially in volatile markets and with non-linear instruments such as options.

 

#3 Real-Time Scenario Analysis Prepares for the Future Unknown

What if the market goes up or down by 10%? Or volatility spikes? Or skew flattens? Real-time scenario analysis can measure how changes in market conditions will affect individual securities or an entire portfolio by shocking variables such as price, time and volatility.

 

Hanweck’s real-time scenario analytics tools allow users to modify scenarios on the fly – and can deliver thousands of customized scenarios for each security in real time to better prepare and understand the impact of potential market moves on a portfolio.

 

Want to learn more? Contact us today for a free consultation.