ETRM refers to the systems of Energy trading and risk management. It involves in the making of commercial decision and also in market execution. This is done using an integrated system enabling the exchange of data in the operations, trade floor, contract and credit and accounting functions. The vital part of the process includes the event and trade nomination/scheduling/transportation and settlement execution. This process ensures market monitoring, price transparency, regulatory compliance and controlled access.
Why is it needed?
ETRM is required to see immense growth and the applications of ERTM is the result of IT growth. The information technology has shown rapid growth recently that the sectors of finance and commodity show a new way of performing business. The markets handling finance has seen tremendous growth and this is due to the new technology and the online trading platforms.
In fact, DRTM has helped customers in executing trades without broker intervention. Even the commodity markets have witnessed the potential of technology and this follows suit with the trade processing from deal capture to final settlements.
The ETRM applications initially was rudimentary that it was limited in terms , handling deal capture physical commodity and was limited with respect to the back and mid office processing capabilities. Today, the applications of ETRM are robust to manage the front with the processing through back office and even the scheduling of physical commodity and derivatives trading are handled rightly.
The software applications may manage energy trading activity in large volumes, while the process of selection of this application is crucial for the margin of any company. Thus there is a need for right software solution addressing the risk monitoring and trading activities.
The ERTM solutions have come as a boon simplifying the once tedious and complicated tasks. These are powerful applications to manage the energy commodities risks. Depending on specific needs, efficiency and compliance is conducted in each business. The organizations must select the proper ETRM system so that they enjoy the overall operating reduced costs and enjoy on ROI.
Energy companies use the ETRM for their trading of physical commodities, but also take advantage of the options, energy derivatives and the swaps. Thus, the companies are able to do business, in energy trading conveniently.
The demand for ETRM application has spawned. The ETRM popularity has increased and basically it offers the same services helping in handling a range of trading activities.