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MARKETS

Derivation Software

Derivation Softwarebrokerage/market makers


More than ever, clients are looking at Agency Brokers and Market Makers to add value, for which they need tools to do just that.

Along with the rest of the financial world, Brokerage and Market Making firms face a changing landscape, where they must avoid their offering becoming commoditised.

Here, the best firms are offering their clients extended services, which is where Derivation can offer the “edge” with flexible pricing and analytic tools; as well as having the client interest and trading database to be able to match counterparty demands against holdings.

extensive market making toolkit

Derivation has a fully functional suite of market making tools which include:

  • House prices being dollar nuked by equity, delta or gamma
  • Powerful quote sheet recording a history of counterparty quotes, recording key analytics (quotes, deltas, price, floor and implied vol) at the time of the quote
  • Real-time Greek analytics, coupled with real-time P&L
  • Historical analytics data and charting service

robust, scalable software platform

Derivation was originally built at a sell-side firm, having been engineered by computer scientists to be completely scalable and run at the largest investment companies in the world, with such key features as:

  • Dealing extremely high trade volumes, avoiding bottlenecks maintaining performance
  • Calculating 10,000s derivatives in real-time
  • Open systems architecture, allowing in-house model integration
  • Quick to implement with “out of the box” APIs for trades, analytics and all market data, capable of easily integrating with any in-house system
  • Regularly deployed across multiple continents running multiple “end of days”

key features for Brokerage/Market Makers


House prices & dollar nuking Price quote sheet
  • Independent house price generation and storage
  • Ability to nuke house pricing by the underlying equity price, delta and gamma
  • Edit-in-grid functionality for “what if” analysis on house prices
  • Stores history of quotes with counterparties
  • History of analytics: quotes, delta, theo price, floor and implied vol
  • Quotes entered by team members are visible in real-time
Analytics Historical analytics
  • Greeks: Delta, Gamma, Vega, Theta, Rho...
  • Implied: Volatility, Credit Spreads & Yield
  • Many more: Premium, Parity, YTM, YTP, YTC...
  • Historic analytics service automates time series data retrospectively
  • Professional historic charting package
Calculators & Gamma Hedging Views & search functions
  • Pop up calculators producing “on the fly” theoretical pricing and analytics
  • Easy to use new issue calculator
  • Worksheets can be filtered, sorted and aggregated
  • Sophisticated search functions allow users to drill down to information quickly
  • User defined formulae can be used in any worksheet for complete customisation
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