Quantitative Options Risk Analysis
With Balfour Capital Group and Boos Investment SARL’s Quantitative Options Division, clients gain exclusive access to proprietary options software that enables advanced modeling of positions over time, market scenario testing, and detailed analysis to identify potential areas of profit or loss. With direct access to Market Maker (M-Maker), this tool further enhances strategic insights, allowing traders to refine their approach based on projected outcomes.
Market Maker (M-Maker) is a robust modeling and risk management tool uniquely crafted for options and futures traders in the commodity markets. With M-Maker, traders can dynamically model positions, explore hypothetical scenarios, and assess potential trades. This capability empowers them with deep insights and analysis, enabling a more strategic approach to advanced options and futures strategies. M-Maker helps traders pinpoint areas of risk and identify opportunities, bringing a higher level of precision and confidence to their trading decisions.
M-Maker Features:
• 2-Dimensional Risk Analysis: Enables traders to hypothetically visualize how positions may evolve over time
• Skew Customization: Allows traders to adjust skew shifts and observe hypothetical changes in position profiles
• Consolidated Option Greeks: Displays Greeks by both individual expirations and across the total position for comprehensive insight
• Unified Risk Reporting: Merges futures and options positions into a single, detailed risk report
• Market Scenario Testing: Empowers users to run specific market scenarios and assess their hypothetical impact on risk and make informed strategic decisions accordingly.
Benefits for Commercial Hedgers:
For commercial hedgers, cash positions are key in defining hedging objectives, whether aimed at maintaining price stability or securing future purchases. M-Maker empowers clients to project positions over time, providing valuable insight into how a hedge might perform under various market conditions. This capability enables traders to make informed adjustments and optimize their risk management approach. With an inherent understanding of the market, managing the risk elements within futures and options hedging strategies becomes crucial for achieving broader hedging goals and supporting overall business stability.
Benefits for Speculators:
Speculators often hold a defined market outlook, and understanding potential risks — whether the market aligns with or diverges from that view — is essential. Traders gain direct access to the advanced analytics available through the M-Maker platform.
Whether employing a short volatility strategy, managing delta exposure, trading skew, or taking a position on the long or short side, risk awareness is critical to assessing whether a strategy aligns with specific market conditions or may result in a loss. Ultimately, trading is intrinsically tied to effective risk management.