Essential Tools for Today’s Trading – Pre-Trade Analysis
September 02, 2019
If you want to maximize profits, you must trade at the best price. To determine the best price, you need to evaluate all costs, including freight costs, product costs, and finance costs – and determine the best trade routes. Unfortunately, analyzing all costs involves different units of measurements, multiple currencies, and different weight conversion factors. This significantly complicates decision making.
Traditionally, traders created pre-trade analytics using spreadsheets, a time-consuming process that was difficult to maintain. In fast moving markets, pre-trade analytics using spreadsheets becomes even more difficult, because you must analyze real-time market data and a large amount of historical data.
The overwhelming amount of data, and the need to evaluate it quickly and effectively to make the best possible trading decisions, has created the need for pre-trade AI and machine learning analytical tools to help traders evaluate massive amounts of data in near real time.
The Power of Pre-Trade Analysis
Pre-Trade Analysis harnesses the power of real-time data – including logistics costs, product costs, inspection and analysis costs, general costs, financial costs, and FX rates – to evaluate your options for fulfilling a trade. The app delivers the answers you need, including:
- Generating all possible options of fulfilling a sale offer with corresponding costs and sale price
- Choose the best trade scenarios by analyzing product costs, routes, customs, finance, and user-defined costs such as premium, bagging, palletization, processing, and more
- Determining the best logistics route based on user-defined INCO term and route mapping
- Evaluate routes by product cost, routes, processing, customs, finance, and other general costs
- Calculating revised offer volumes to utilize the complete capacity of equipment based on its stowage
- Optimizing equipment utilization for cargo movement using revised volume functionality
- Appending any user-defined costs, including premium, bagging, palletization, processing, etc.
The result? You can quickly and easily determine the top margin and price, find the lowest possible costs for transactions and reduce the cost of goods by fulling utilizing capacity of equipment. And, not just for today. You can use the system to generate trade scenarios and prepare for future price volatility by simulating different scenarios all possible scenarios for sale or purchase.
A metals trading company purchases scrap metal – copper, lead, aluminum, and more – from Africa and sells it in Asia. Products take more than a month to ship, and customers occasionally back out of deals as prices fluctuate while products are in transit. Vendors also will void deals if circumstances change. It is imperative that the company make the most profitable, efficient, and smart trades to avoid disaster if a counterparty backs out of a contract. Eka’s Pre-Trade Analysis app can help.
Maintaining profits requires making the best possible deals with the right counterparties and optimizing trade routes to get the products to trade partners as efficiently as possible. With Pre-Trade Analysis, the company can evaluate every potential deal in advance to determine which ones make the most sense – both choosing the best vendors and the best customers for each transaction. The company can play with various scenarios to prepare for possible market shifts, trade wars, even disruptive weather events.
Long before committing to a purchase or sale, the company can evaluate all possible options to determine the right trade route, prices, and counterparties to reduce risk and maximize profits.
Mary DeFilippe spends her days creating engaging content – blogs, white papers, articles, and more – that helps readers better understand new technology. She can frequently be found walking around the office listening to heavy metal music while pondering ideas for her next blog.