Asset management

Asset management is an important feature of a financial software. It uses the updated status of the investment to provide the necessary tools in creating every possible outcome, such as future payments that are distressed, conversions for debt to equity and maturity of loans. It also provides an efficient tracking of payment dates and rates. Updated financial statements are readily available, which makes it very easy to determine credit standing and as a result make proper adjustments on the projections. Asset management can modify dates of payment, conversion of floating to fixed rates, deferred payments, interest rates, maturity extensions and change schedules for repayment. It also uses various assumptions to store and run multiple cases such as downside, base and upside.

Fund management

The next feature is fund management, which provides an accurate projection of all the investments as well as factors of the borrowing and operating cost of the fund in order to create a view of the cash levels in the future and investment returns. This system aids in the evaluation and structuring of any fund. Fund management provides a combination of the projections of the cash flow on all investments in order to create a monthly summary. It provides customized assumptions on the leverage cost, interest income, taxes and expenses. The system also creates several scenarios concerning the cash allocation such as reinvestments, distribution of investors and fresh investments. It also creates an analysis of the leverage and call of the capital. Income statements and anticipated balance sheets can also be efficiently created with the use of the system.

Data warehousing

Another feature of the financial software, is the data warehousing. This feature syncs the accounting system and retrieves investment transactions. It also uses a customizable category or name. This key feature allows an effortless re-categorization of the investments. The calculation of investment statistics will depend on the computation of the user at any given moment. Customized reports on the performance of the investment can be created using any of the calculations programmed in the database of the system. There are approximately more than 100 various calculations programmed in the system. If there is a need for more calculations, then it can easily be provided for the user. Several investments can be categorized into subgroups or groups and they will be used for the creation of totals. It identifies the total price of the fixed income in comparison to the equity investments.

High Frequency Trading

In financial markets, high-frequency trading (HFT) is a type of algorithmic trading characterized by high speeds, high turnover rates, and high order-to-trade ratios that leverages high-frequency financial data and electronic trading tools. While there is no single definition of HFT, among its key attributes are highly sophisticated algorithms, co-location, and very short-term investment horizons. HFT can be viewed as a primary form of algorithmic trading in finance. Specifically, it is the use of sophisticated technological tools and computer algorithms to rapidly trade securities. HFT uses proprietary trading strategies carried out by computers to move in and out of positions in seconds or fractions of a second. Aldridge and Krawciw, 2017 estimate that in 2016 HFT on average initiated 10-40% of trading volume in equities, and 10-15% of volume in foreign exchange and commodities. Intraday, however, proportion of HFT may vary from 0% to 100% of short-term trading volume. Previous estimates reporting that HFT accounted for 60-73% of all US equity trading volume, with that number falling to approximately 50% in 2012 were highly inaccurate speculative guesses. High-frequency traders move in and out of short-term positions at high volumes and high speeds aiming to capture sometimes a fraction of a cent in profit on every trade. HFT firms do not consume significant amounts of capital, accumulate positions or hold their portfolios overnight. As a result, HFT has a potential Sharpe ratio (a measure of reward to risk) tens of times higher than traditional buy-and-hold strategies. High-frequency traders typically compete against other HFTs, rather than long-term investors. HFT firms make up the low margins with incredibly high volumes of trades, frequently numbering in the millions.

©2010-2018 Viz Software Consulting Ltd. All Rights Reserved.