By KWA Analytics and Beacon Platform
In today’s global markets, volatility has taken center stage, driven by the ongoing pandemic, supply chain disruptions, and the Russia – Ukraine war, and has caused traditional trading models to be stressed to their maximum. Quants, traders, and risk managers are tasked with re-evaluating modeling and risk management systems to meet these dynamic needs.
KWA Analytics, Beacon’s energy, commodities, and capital markets partner, is constantly hearing from its clients about the challenges they face in the marketplace. Whether it’s crude oil going negative, evaporating liquidity in the nickel market, or large market swings, these events sit at the forefront of clients’ trading operations and drive the need to make model changes quickly, and in a controlled manner.
KWA recognizes that not only does Beacon’s energy trading and risk management (ETRM) solution provide clients with the flexibility and scalability of a cloud-based environment to meet clients’ ETRM needs, Beacon also enables faster and easier modifications as well as staffing thanks to Beacon’s use of Python.
Building quickly and independently
For firms working with legacy technology, modeling new assets or creating and trading new financial products, this is an intractable problem. Beacon Platform, built on top of Python and having a transparent source code license, helps solve the challenge of constantly needing to innovate to keep up with changing markets.
We’ve been asked before why we use Python. One answer is it provides flexibility and faster development time. This is vital in today’s market, as Python enables easier in-house model maintenance and build-out.KWA has seen this work to their clients’ advantage as they move to cloud-based ETRM platforms.
“Our clients can make adjustments right to Beacon and model new instrument classes or products without having to ask for a vendor enhancement to black box systems. Enhancement to black box systems may take a client a year, two years until they go through an upgrade cycle to receive that enhancement. With Beacon, we are able to turn it around in a couple of days, so the development and implementation cycle is just completely different compared to black box systems,” says Barry Lowe, Senior Vice President of Capital Markets, KWA Analytics.
Appealing to today’s developers and CTOs
Python has another appeal for developers. New graduates ready to start their careers have taken classes in Python and want to use this and other modern development tools in the energy and capital markets. This in turn provides a steady supply of potential recruits.
“The new generation coming out of school are getting proper training in Python, so it’s easier for them to be able to make adjustments right to Beacon or to be able to model these new instruments classes or products without having to ask for a vendor enhancement to black box systems,” said Will O’Brien, Executive Vice President of Sales, KWA Analytics.
But it’s not only the incoming engineering workforce who care about Python, it’s also today’s CTOs.
“Technology has shifted from 15 to 20 years ago when CTOs used solutions built around proprietary languages. Today, modern CTOs focus on solutions that help accelerate businesses growth and enable digital transformation. They know that modern platforms are better positioned to enable them to scale their businesses,” said Lowe.
Providing apps for end users
The use of Python with Beacon enables developers to produce solutions quickly. As developers sometimes prefer to use off-the-shelf software solutions or packages, the Beacon App Store allows for such flexibility. Beacon developers can implement, package, and distribute their apps and analytics to other parties, or choose from a variety of apps, libraries, and modules to speed up their internal development.
Want to create an app to manage data across multiple products? Does your energy trading firm need a faster way to model volatility for crude options? Need to manage P&L throughout the trading day for bespoke instruments? With the Beacon App Store customers have the flexibility of choosing which off-the-shelf components to use, and which to build in-house.
KWA shares its enthusiasm for the Beacon App Store. “For our customers seeking custom projects, it can be directly built within the App Store approach. More solutions will be made available to the wider community, rather than being kept on a local project,” said Fred Reimer, Director of KWA, KWA Analytics.