Cumulus9 came to our attention recently. According to its website it is “reshaping the landscape of risk management for exchange-traded derivatives. We leverage the power of cloud technology to unlock new dimensions in margin forecasting and risk analytics.” Recently, I spoke with Giuseppe Fiocco, Founder & Managing Director, and Rafik Mrabet, Managing Director, to learn more. “We service derivative market participants,” they told me. We serve clearing brokers and end user customers that include commodity trading firms.” It has replicated the clearing house margin calculations for over 80 exchanges even including those that have shifted from SPAN margining to VaR-based mechanisms. “We understand both and so that allows us to help in terms of transparency around how these work and how to understand margin calls.” Cumulus9 was founded around two prominent challenges that it says has emerged. “Firstly, during volatility spikes, many market participants struggle with substantially higher margin calls than their daily averages, highlighting a critical gap in preparedness for potential margin fluctuations. Secondly, there exists a lack of transparency in CCP margin models. This opacity impedes effective risk management and restricts market participants’ ability to estimate and efficiently anticipate margin calls from CCPs,” they said. According to product… continue reading