How margin and collateral optimization can benefit your entire organization

margin and collateral optimization can benefit your entire organization

The current unprecedented volatility has led to significant swings in Mark-To-Markets (MTM) and increased margin calls.

Now more than ever, it is key that you are equipped with tools that will allow your firm to understand the costs, and drivers, of margin movements.

Last week, Mohit Gupta, Senior Product Specialist at Cassini Systems, explained why your front office needs access to collateral and cost optimization tools providing margin transparency, collateral sufficiency, and the ability to understand margin drivers – enabling you to reduce your margin costs.

This week, Mohit moves a step further and explains why your entire organization – from the front office to the back office – can benefit from margin and collateral optimization tools that give you transparency over your margin. 

Key takeaways

– Empower your front office –

Specifically given current volatility

Ø The first step is understanding the drivers of your margin. The second step is looking at how to optimize your margin.

Ø You need to make sure you and your firm understands the rules of your collateral including eligibility, substitutions, waterfall rules, the haircuts and much more.

Ø Understanding who the best broker or the best dealer to trade against will enable you to minimize your risk offset, giving you the best chance of reducing your margin.

Ø Optimization will enable your firm to reduce costs, improve the liquidity of your collateral and efficiently perform your operations.

Resources for you:

Ø How Pre-Trade IM Calculation can optimize and reduce collateral drag 

Ø Take control of IM with forecasting and optimization

Ø Evolution of Collateral: Moving Collateral Optimization into the front office