Professional Trading Solutions/Sterling Trader: State-of-the-art Risk Management for the Trading Community
Farid Naib, CEOTwo of the most difficult challenges currently facing the active trading community are the difficulty of calculating real-time risks for large sophisticated portfolios and an increased demand and regulatory requirement for online compliance checks. Professional Trading Solution’s wholly owned Sterling Trader division has chosen a technology based approach to address these challenges. “Just a single compliance check is not enough. You need to do a full suite of consolidated compliance checks across multiple trading platforms, and that’s what we provide,” says Farid Naib, CEO of PTS and Sterling Trader. He points out that many large players use or support multiple platforms.
“In addition, the proliferation of inverse and leveraged ETFs have made the life of the risk manager much more difficult,” says Mr. Naib. Sophisticated trading strategies involving these products often obscure potential risks in which sudden market moves may overwhelm a trader’s equity and expose the firm as well as their brokerage and clearing partners to potential market losses.
Sterling Trader’s risk management solutions are designed to provide both brokerage firms and traders much-needed visibility to identify portfolio risks. Based on client designated risk thresholds, Sterling Trader’s risk management tools track market movements and trading activities to provide notification whenever the client approaches or surpasses the risk threshold. One of the tools in Sterling Trader’s product suite is the Sterling Aggregator risk and compliance technology, which allows clients to manage real-time risk and compliance for customer accounts. Sterling Aggregator was designed with connectivity across multiple platforms under consideration, which differentiates Sterling Trader’s technology from competing solutions.
Most risk management procedures are client specific, so Sterling Trader has made sure its solutions are highly configurable to suit individual client requirements. This is demonstrated in Sterling’s recent deployment with a U.S. clearing firm. The clearing firm needed to manage a global trading base of thousands of professional traders using multiple platforms and executing several billion shares per month. Sterling delivered a customized solution that uses Sterling Aggregator to enforce risk and compliance in real-time, regardless of the platform traders were using.
Sterling Trader’s systems are multinational, and function for the U.S. and foreign equity and options markets.
Our proprietary technology, high level of connectivity and ability to handle equity exchanges around the world sets us apart
Sterling has clients trading U.S., Canadian, Brazilian, Chinese and European equities and options.
Sterling Trader is also currently working on a Mesh calculation engine which Naib claims will allow quicker real-time risk calculations. This Mesh approach replaces existing computationally intensive systems which are hard to deploy for real-time risk assessment. “Our calculation methodology allows us to provide real-time analysis which we think will be disruptive,” affirms Naib. “We have also created a grid of compliance risk checks that we feel captures many of regulatory r equ i r ement s for compliance checks, which we are moving out as a risk tool.”
Based on the company’s current work on the Mesh calculation engine, Naib says the trading community can expect a real-time risk tool in the months to come that handles market and volatility movements for a sophisticated portfolio including equities, options, ETF and leveraged and inverse ETFs.
The tool is meant to automate risk management to a large degree. “For example, our risk manager will auto-generate emails to the people involved in a company’s risk committee when a client or a firm reaches a risk threshold condition,” Naib adds. Sterling Trader also plans to introduce a web and mobile trading platform.
System stability supporting trading activities, especially during period of peak volatility, is an essential demand of this vertical, and underpinning its stable platform is world-class client support which Sterling Trader delivers with a sophisticated system topology.
With an established international presence as a software company servicing equity related trading activities, Sterling Trader is confident about its long-term goals of broader global expansion.