The Commodity Position Management System (CPMS) is a Windows-based system providing accurate, timely information which helps a trading company manage their trading position from several different risk perspectives while providing the necessary support information for accounting, contract administration, treasury and traffic.
All trading positions (contracts) are monitored from their inception through final liquidation, providing full reporting on trading activity. Trading instruments handled by the system include:
All trading positions (contracts) are monitored from their inception through final liquidation, providing full reporting on trading activity. Trading instruments handled by the system include:
The system also tracks investment/borrowings and accrues income/expense, although these are not treated as trading instruments.
The system was designed to handle the unique physicals trading requirements such as:
Comprehensive position reporting is provided based on single transaction entry. For example, the entry of a purchase contract immediately impacts the trading company's risk position, the customer's credit position, the trading company's cash forecast, and the traffic delivery forecast.
(Top)Mark-to-market valuations are performed at the end of each day to determine the unrealized profit or loss for each individual contract based on the contract price, the closing market price, the open quantity and the value date of the contract.
Mark-to-market methodology varies slightly, depending on the market.
Anticipated expenses may be entered as the contract is entered and are reported as follows:
The system allows additional traffic/operations information to be entered for physical contract shipments, including shipping/carrier identification, ETA/ETD dates, bill of lading/airway bill information etc.
Allocations may also be entered to ‘match’ contracts prior to liquidation/settlement. Provisional and final weights are monitored and reported.
(Top)Physical trades may be matched with futures or foreign exchange hedge transactions with a common deal number; a deal report may then be printed segregating these deals from the overall position, and allowing review to ensure deals are appropriately hedged.
(Top)CPMS handles the processing of metal concentrates which typically include contract specifications of assayable elements, typical assays, unit deductions, payable percentages, penalties, refining charges and treatment charges. Processing includes transaction reporting, valuations, assay entries (provisional and final), assay exchange, provisional and final invoicing. The risk reports related to concentrates can be combined with overall metal risk, hedge and accounting reporting.
(Top)Comprehensive reporting is provided on the trading activity, position and performance, including:
Several forms may be produced by the system, including contract confirmations, sales invoices, broker P&S summaries, and debit/credit notes.
Full transaction audit trails of all trading and accounting activity are provided; contract changes are shown with before and after images to shown how the contract was changed.
While the system provides most reports required by a trading company, situations may arise where the necessary information is not reported - if the data has been entered into the system, it can be retrieved in other sequences, either in total or in detail.
The system data is available directly to any Windows-based reporting tool which utilizes ODBC (Open Database Connectivity); most Windows-based reporting tools support this standard. Commonly used tools to access and report on our data include Microsoft Excel, Microsoft Word, Crystal Reports as well as most other spreadsheets and report writers.
(Top)An integrated accounts receivable and accounts payable system provides full control over receivables, collections, payables and disbursements; both systems support multiple currencies and may be used for non-trading-related transactions.
The system will monitor actual expenses entered and at the end of the month will prepare an accrual analysis showing expenses recorded against unliquidated contracts as well as liquidations where actuals have not been recorded, providing a working document for accounting to help determine expenses to be deferred/inventoried or accrued for the month.
The system provides all the information necessary to prepare standard summary accounting journal entries to reflect the trading activity, along with supporting detail. The system can also generate journal entry files which may then be passed to an independent automated general ledger system.
(Top)The system is currently being used to trade precious metals, refined metals, ores and minerals, energy products (natural gas, crude cargoes, refined products: gasoline, heating oil, jet fuel, etc.), electricity (deliveries and futures), coffee, cocoa, and financial futures (stock indices, interest rate futures, etc.).
Users include trading companies, major producers (mining companies and refineries), consumers, and trading arms of major banks. Current users are located in the U.S., Canada, the U.K., and Europe.
(Top)One of the common problems reported with most systems is the lack of adequate security and/or audit trails. Our system has been designed from the beginning with a keen concern for security as well as maintaining adequate transaction files to provide the necessary audit trails to support position, performance, customer exposure and contract changes.
Each user is provided an individual user-name to access the system and an access level is assigned. This access level controls the screens the user is permitted to view or update.
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