What is ETRM?

ETRM stands for Energy Trade and Risk Management. CTRM stands for Commodity Trading and Risk Management. The names are used for a range of software solutions which support the trading and risk management of commodities.

ETRM for physical and financial trading

Commodity prices are often rather volatile and constitute a large portion of the total costs of production. Comprehensive ETRM and CTRM solutions support both physical and financial trading, and can deal with a wide variety of commodities, not only energy: power, natural gas, soft commodities (agri), metals, crude oil and oil derivatives, plastics, and more. The solutions provide a transparent view of complex portfolios, and are used by energy producers, energy suppliers, large energy consumers and other companies with significant commodity price exposures. The systems aid both front office (traders), middle office and risk management, and back office.

From front-office to back-offce

ETRM solutions ideally provide front-to-back support. This includes:

  • deal capturing and price management
  • logistics and scheduling
  • position management
  • risk reporting (VaR, EaR)
  • valuation and optimization
  • accounting, settlement, regulatory reporting

Each system has its own strengths and weaknesses, and each focusing on particular commodities, functional areas or user groups.

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