We have often heard from CTRM vendors touting their ability to handle multiple commodities and commodity types in a single platform, spanning from energies such as natural gas, hydrocarbon liquids, and power, to metals including base metals, ores and concentrates, and to ags and softs. However, digging a bit deeper into these systems, it’s not unusual to find that while many can model a variety of contract types and even occasionally the logistics of multiple commodities, they often fall short in the area of modeling price terms – particularly for those commodities that have complex pricing based on numerous quality or physical characteristics such as those associated with cotton or metal concentrates. In these cases, some of these “multi-commodity” systems require workarounds up to and including the use of outside spreadsheets to calculate prices, positions & exposures – effectively defeating much of the value of trying to utilize a single platform to manage all your commodity trading activity. Other issues, such as specific reporting requirements, complex units of measure conversions, supply chain and logistics tracking can also be remarkably different for specific commodities at a certain level of required detail. Recently, we had the opportunity to visit with Enuit’s senior… continue reading
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