Cash Margining Tool
Patsystems Back Office Adapter integrates with the Patsystems trading infrastructure and your back office system. The overnight position data feed from the back office to Patsystems means that, at the start of each day, the Patsystems risk engine has a view of all activity on the account, not just trades entered through Patsystems. The back office can also provide Patsystems with the true overnight available funds, which can then be used for cash margining decisions. There are a number of data files that can be loaded via the Back Office Adapter, which are listed below:
If Cash Margining is implemented, it will be necessary to specify the Margin per Lot to trade a particular instrument. While this information can be entered manually, it is often available from the back office and can be loaded nightly, therefore reflecting any changes in margin requirement from day to day. The ratings file can load ratings down to maturity level (contract date) although it can also be configured to load only at commodity level. If loading at maturity level, all maturities must be loaded so that the margin is applied to any instrument traded. Different margin per lot values can be loaded in against different rating names for the same contract.
Most back office systems also contain up to date exchange rates. They can be loaded nightly in order that P&L is calculated more accurately.
Each night the back office calculates the available funds for any given account. This value is used in sequent cash margining decisions the next day to allow or disallow an account from trading.
Overnight positions are loaded as a single start of day position marked to the current day’s settlement. The settlement price provided in the file is loaded into SARA into the SOD price of the SOD position. It is important that this settlement price be in the same scale as the price displayed on Patsystems in order that P&L be correctly calculated.