Commodities: The Critical Moment

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Trading during volatile times is tough. In today’s market, commodity traders may have it the toughest. However, with great challenge comes great opportunity.

At the start of 2022, Symphony CEO Brad Levy aptly noted “the world is experiencing more volatility, at a greater velocity, with a greater variability of outcomes.” We are certainly seeing this play out.

Now facing what Brad termed “the Volatility Monster”, what commodities traders need more than anything is a technology stack that can match the breakneck pace of current markets. To do so, and no matter whether tracking crude stock or hedging livestock, it has never been more critical to remain informed, engaged, and above all – connected.

With the right tools, traders can combine insights, connectivity and speed to stay ahead of the volatility monster and capitalize on the opportunities hidden beneath the surface.

Market Volatility

Geopolitical struggles – and open war – have a profound and often immediate effect on energy markets. Supply chain disruptions rooted in pandemics, political tensions, adverse weather conditions, and sanctions have accelerated and expanded this volatility into metals, agriculture and beyond.

In the case of the war in Ukraine, one report concluded it is “useful and highly informative for investors and policymakers to understand the dynamic risk spillovers in the commodity markets.”

In attempting to consume rapid geopolitical developments and market-moving events, traders struggle to stay ahead of the curve. As the stakes are raised, the adoption of technological tools that reduce information overload and maximize efficiency is critical to success. Targeted data streams, event summarization and comprehensive connectivity to market participants are some of the ways Symphony is helping traders make faster, more informed decisions.

Tightening Regulation and Risk Management

Like the rest of financial services, the commodities market is characterized by stringent regulation.

In the modern era, market analysis and price negotiation often occur through off-channel communication channels like WhatsApp, WeChat, SMS, and LINE. Beneficial for their speed and simplicity, these material interactions must still be archived and recorded to comply with regulatory requirements. No trader wants to be left holding the bag for quoting a price outside the view of their compliance team. This dynamic creates the need for meticulous risk management, which is precisely what we enable.

Meanwhile, an overflow of communication data will hamper anyone’s ability to trade while managing risk. By consolidating voice, chat and messaging flows into one ecosystem alongside data, research and analysis, Symphony allows traders to simultaneously move with efficiency while hedging.

Competition is Fierce

At its best, technology allows market participants to future-proof their businesses. As stated by McKinsey, those who embrace digital innovation “will be able to offer an enhanced customer experience and benefit from new market opportunities, while simultaneously reducing their administrative burden”. By contrast, those who fail to adapt are simply left behind.

Success in the commodity market of the future lies in the embrace of the full capabilities of communication, data, and AI. Symphony, in its promise to eliminate the complexity of fragmented, legacy technology and streamline operations with innovative, agile solutions, will help traders maintain their competitive edge.

Solutions for the Critical Moment

In an environment characterized by growing market volatility and compliance regulations, speed is simply crucial. Symphony offers robust solutions tailored to these challenges, connecting people more effectively and ensuring clients have fast access to critical insights hiding inside their own data. By streamlining workflows and processes, Symphony makes traders better by making their jobs easier.

When markets evolve as quickly as we are all seeing, innovation itself becomes the advantage in preparing your business to handle this ever-changing environment. Our technology delivers a significant competitive advantage precisely when it is needed most…

… at the moment of decision.

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