This is the second article in our Why We Built Loqsea series. The first, with Tomasz Rydzewski, covers the operational and technical gaps he experienced firsthand on commodity trading desks. Reza’s perspective is different: he has seen both sides of the industry, from the inside of a high-growth SaaS business and from within a multi-billion dollar global investment firm. That dual lens shapes everything he sees in the commodity trading technology market today.
Having worked at a Unicorn SaaS startup, as well as a multi-billion dollar (now trillion dollar) global investment firm; I got to see both sides of the industry. The processes involved in software development/sales and the detail-oriented focus of trading firms when it came to execution, position management and operational efficiency.
What struck me was the power of technology to not only transform organisations that adopted it but to see first-hand the competitive advantages that technology can deliver in industries where every second counts and compounds. – Reza Tareen, Maneging Director at Loqsea technology.
There are many problems that Loqsea solves. But one that became immediately obvious was the incredible reduction in manual work required by our clients. Alongside that the increased accuracy due to the reduction of room for human error.
Loqsea not only saves our clients time, it helps them avoid potentially costly mistakes. In commodity trading, where positions move quickly and decisions compound, the cost of a manual error is rarely small. The firms that recognised this earliest were the ones asking the right question: not what does this system cost to run, but what is our current setup costing us.
A gap that became clear, where Loqsea really stood out was our ability to trade capture. Many firms could trade capture their electronic trades but were still unable to automatically trade capture their voice brokered trades. This was one of many gaps that Loqsea filled.
Voice brokered trades, those executed over the phone or through a broker rather than electronically, still represent a meaningful portion of activity across commodity trading desks. Leaving them outside of automated trade capture creates latency, increases the risk of error, and means positions are never fully up to date. This was one of many gaps that Loqsea’s Risk Manager was built to fill.
There are competing priorities in all firms. Existing legacy systems are comfortable, and people are resistant to change and the short-term pain that might come along with it. Traders may find a tool that does many things better than their current system, yet may struggle to convince the decision makers to make the transition due to the associated pain of transitioning.
Many have the mentality of “if it isn’t broken, dont fix it”, unfortunately this could lead to firms waiting too long to modernise their infrastructure and may only make a change when things have gone wrong.
Loqsea is driven entirely by the needs and wants of traders and risk managers. Our team includes ex-traders and risk managers who have been in the field themselves and so know our clients needs first hand. This means our product is built by traders for traders.
Traders are the ones taking risk. Traders are the ones generating P&L. If the system does not work for them, it does not work.
Intra-day estimations on margins and VaR or waiting till end of day was a norm. Having multiple systems, spreadsheets and news outlets open on various screens. With Loqsea’s Risk Manager, everything is in one place. Real-time risk calculations, live P&L, mark-to-market exposure, all visible continuously as the market moves. What previously required an end-of-day process and a team of people to compile is now available during the session, without asking anyone to produce it.
The best day to improve your system was yesterday. The second best day is today.
At Loqsea, we have found the most effective approach is to get set up on the new system in parallel with your current way of working. This way you run very little risk of anything going wrong and can sense check both systems simultaneously, seeing the advantages of each while getting used to new and improved ways of working. It removes the fear of transition and makes the case for change obvious quickly.
The firms managing market volatility well right now are not necessarily the ones with the biggest budgets or the most experienced traders. They are the ones whose infrastructure lets them see clearly and act quickly. If yours does not, that is worth fixing, and it is worth fixing before the next major market event, not after it.
Want to see how Loqsea works in practice? Book a demo and we will walk you through the platform in the context of how your desk actually runs.
