The changing landscape of derivatives trading in recent years has led to shrinking margins, greater volumes and higher capital costs associated with derivatives trading. In addition to calculating fair value, banks must now account for what many practitioners are calling ‘the XVAs’ (a term which includes CVA, DVA, FVA and other adjustments) to truly capture the costs of conducting derivatives business. As a result, the question of profitability within derivatives trading is in the spotlight. Understanding and holistically managing trade profitability with a complete understanding of the trade lifecycle is a critical need.

In this research paper, Satyam Kancharla, Numerix Senior Vice President and Chief Strategy Officer, discusses the concept of Trade EVA (Economic Value Added) along with other industry best practices for integrating risk into pre-trade analytics and looking at derivative trade profitability more holistically.

Highlights include:

  • The Changing Landscape of Trade Profitability
  • Examining the Tradeoff between Counterparty Risk and Funding Risk/Costs
  • EVA (Economic Value Added): A Brief Introduction
  • Trade EVA and the Development of a Trade Profitability Framework
  • EVA and the XVA Measures
  • Best Practices for Process Re-engineering and Implementation
  • Best Practices for Visualizing EVA

To Download this Complimentary White Paper Complete the Form On the Right of the Page.

About the Author:
Satyam Kancharla, SVP Client Solutions Group, Numerix

Mr. Kancharla is currently the head of Numerix’s Client Solutions Group, which is responsible for Product Management, Financial Engineering and Client Services. Prior to this, he has served in various roles in Quantitative Software Development, Financial Engineering and Pre-Sales at Numerix.

Before joining Numerix in New York, he was the CTO for Numerix Japan LLC in Tokyo, heading the Pre-Sales and Financial Engineering teams for Asia. Earlier in his career, Mr. Kancharla also worked with Merrill Lynch and GE Capital in Quantitative Finance and Product Development roles. He holds an MBA degree, an MSc degree in Applied Statistics and Informatics, a BSc in Mathematics and Computers, and CFA and FRM certifications.

 

If you experience any difficulties viewing or completing this form, please contact us for help.

in the news - Aug 4, 2020

Numerix - Best Risk Management Solution: WatersTechnology Asia Awards 2020

product collateral

NxCore For XVA | Fact Sheet

in the news - Aug 21, 2020

WatersTechnology Asia Awards 2020 Winner's Interview: Erdem Özgül and Stephen Cheng, Numerix

newsletter issue - Aug 13, 2020

Thinking Derivatively – August 2020 Newsletter

news - article pdf - Aug 11, 2020

SRP Asia Awards 2020: Numerix Wins Best Pricing & Analytics Provider

white paper

White paper | The Current State of XVA Usage in Latin America

news - article pdf - Jul 20, 2020

Numerix - Data and Analytics Vendor of the Year : GlobalCapital’s Americas Derivatives Awards 2020

on-demand webinar - Jul 1, 2020

Numerix and CubeLogic On-Demand Webinar | Risk Management Post COVID-19: Lessons Learned So Far

press release - Jun 15, 2020

Ted Pendleton Eyes Acquisitions and New Growth Initiatives as Numerix’s Latest Industry Hire

newsletter issue - Jun 10, 2020

Thinking Derivatively – June 2020 Newsletter

press release - Jun 2, 2020

Numerix Positions for Next Phase of Growth with Three Leadership Team Promotions

news - article pdf - Apr 24, 2020

Women in Technology and Data Awards 2020: Vendor professional of the year (trading and risk) |...