•  
• Tweet
•  
•        Print
•  
•         Track Keywords
•  
• 

By Gary M. Vasey, Ph.D.: Tracking the energy trading space this last 12 months, our research has shown that a dichotomy in requirements may be emerging. The entrance of "speculators" in the form of multinational oil companies, investment banks and hedge funds and the retreat of the utilities to a more asset-centric business model is responsible for this new dichotomy in requirements. While there is considerable overlap between the "speculators" and the utilities in the sense that some "speculators" own assets and some utilities still "speculate," there are still two distinct sets of requirements, even in a single organization.

The New Dichotomy in Summary "Speculators" in energy trading usually take a view on where they believe the market is going either through fundamental analysis or using trend following models or a combination of both. Often they will engage in complex trading scenarios that require disagregation of the risk elements involved making a particular trading strategy a number of transactions for the purposes of recording the deal and its risk attributes in a software system. They may see both their view on the market and their approach to risk management as competitive differentiators. For the "speculator," system architectures may be "custom" and contain several in-house components. While they may use vendor-provided applications they want to be able to replace particular applications as required and plug them in to the overall solution. "Spec......................

To view our full article Click here