Energy trading technology
Energy Trading technology is usually abbreviated to ETRM technology, which stands for Energy Trading and Risk Management . ETRM and FTRM (Financial Trading and Risk Management) environments are highly comparable. Both trading communities are using components such as trading systems, pricing systems, risk management systems and market data. There are however differences, which are caused by differences in the nature of the traded instruments and its settlement but also by differences in the maturity of the trading process itself.
ETRM systems often work for some asset classes but not others, e.g., handle natural gas and crude oil trading but not electricity, or only allow rigid portfolio structures into pre-determined asset classes. This clearly affects business processes such as risk management, pricing, forecasting and settlement. As the market lacks integrated solutions, many firms deploy internally developed systems which cover sub-processes such as forward curve calculation or portfolio analytics. Apart from a relatively high total cost of ownership, this type of architecture makes it difficult to get a global view on the business.
A similar trend is observed with respect to data management: massive in-house built solutions, which lack user-friendliness and quite often incorporate dozens of interfaces to data sources, resulting in over-investments and significant maintenance costs.
