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Online auction for trading forward freight agreements in Shipping industry
Summary
This is an auction site for trading forward freight agreements in Shipping industry. The solution is built utilizing the Auction Engine in MarketServer Product.
Challenge
H.Clarkson & Co. Limited, U.K. is the largest international ship-broking company in the world. They introduced the concept of Forward Freight Agreements in 1991. Forward Freight Agreements (FFAs) are principal-to-principal contracts, where one party takes the view that the price of an agreed freight route, at an agreed time, will be higher than the agreed level. The other party contracts to differ. The settlement is done at the appropriate time between the contracting parties. Clarksons act as the brokers to the contracts.
In order to gain competitive advantage and offer simplified services using modern technologies, Clarksons decided to create an electronic market place to allow the trading of FFA’s in a secure environment. Calsoft developed a software solution based on MarketServer.
Solution
Calsoft developed a complete solution which allows the placing of bids and offers, in addition to the additional features below.
Forward Trading for multiple markets
Manual and automatic matching of trades by the system
- Counterparty based
- First Come First Served if multiple matches
- Preferential rejection
Sophisticated Trading screens
- Color schemes
- Mouseover Price Progression
- Filters (company and counterparty based)
- Counter-party and self-company checks on trading placement
Auto screen updates
- Support for multiple concurrent trades for a trader per month per route in multiple markets
- Counter-party vetting and anonymity
- Multiple contract models - monthly contracts on voyage, timecharter routes and quarterly, yearly with timecharter averaging
Automatic Settlement
- Different commissions possible for different markets and route
- Indices-based (BIFFEX) settlement computation
- Filters (company and counterparty based)
- Averaging across indices on multiple routes for certain trades
- Invoice info generation with commissions, buyer/seller/broker bank details
Portfolio management
- Company and individual trader portfolios
- What if scenario speculations on Profit/Loss
Company Contracts management
- Compose contracts based on trade agreements and standard templates
- Email contracts to counter-parties
Extensive Administrative Interface
- Extensive user management - 5 types of users with different access privileges
- Visual, audio and email notification of administrative events
- Place/Withdraw bids/offers on behalf of clients
- Modify Trade volumes if required before final deal consummation
- Fixtures Reports
- Indices data input
- Create/Suspend/Delete new markets and routes into the system
- Ticker messages control
Technology
The solution was deployed using the Microsoft version of MarketServer with the Database Server as Oracle 8.0 Enterprise Edition.