Risk Netting Service.
The only digital platform for automated risk netting of Interest Rates Swaps inclusive of trading constraints, PnL control and contingencies.
The case for change.
Market makers handle huge client volumes that accumulate over time. Hedging one trade at a time can be inefficient and leave dealers exposed if the market moves against them. The process also demands that traders reveal their axes to the market in order to execute their trades. Finally, when unprecedented volatility hits the rates markets, as is happening today, liquidity can rapidly dry up. In times like these, firms need a new approach that can deliver the liquidity they need in minutes, to efficiently manage their portfolios.
The Wematch Risk Netting Service, part of our Interest Rates Swaps platform, automates Euribor IRS hedges; enabling bulk trades to be initiated and closed in 10 minutes or less. Our Service transforms unwanted dealer positions into fresh mid-market exit liquidity.
Through an intuitive user interface, dealers simply input their DV01 exposure per Tenor to be reduced, trading constraints (e.g., PnL, Curve, and Fly Constraints), and mid-market prices for each Tenor.
From there, our Service generates matching trades in bulk according to traders’ trading constraints and contingencies, then calculates the PnL on resulting deals ensuring that the trades respect the PNL threshold set by the traders.
Results reports are sent and the trades are then automatically released and booked.
The Wematch Risk Netting Service is the only digital platform for automated IRS risk netting inclusive of trading constraints, PnL control, and contingencies. Benefits include:
Significantly reduces the time dealers spend hedging unwanted positions.
The Service enables dealers to focus on value-adding activities.
Creating a marketplace for unwanted hedges across banks generates a deep but momentary liquidity pool, which is particularly beneficial during periods of market volatility.
The Service reduces dealers’ long and short exposures across the yield curve, reduces PnL swings caused by unwanted risk, and leaves them with a cleaner book that’s easier to manage .
Hedging trades one at a time and paying per-trade brokerage fees can really add up the costs. We offer a subscription-based, an all-you-can-eat Service, which can significantly reduce costs.
Using Wematch means dealers do not need to expose their axes, helping them better protect their competitive information.
Why choose Wematch
With Wematch, firms benefit from a platform that accelerates the digitalization of trading workflows.
With our platform you benefit from:
Wematch Interest Rates (WIR) includes additional (EUR IRS) modules in addition to the Risk Netting Service:
The Wematch Risk Netting Service is simple-to-use. Just input your data and see results within 10 minutes or less. To get started, or to request a demo, get in touch.