Derivatives software leader FINCAD announced the release of a new version of its acclaimed derivatives analytics platform F3.

The financial sector has seen choppy waters in recent months, with economic turmoil roiling through global markets with ongoing concerns with the debt crisis in Greece and slumping economic output worldwide. The Wall Street Journal noted on Monday, October 3, that the Chicago Board Options Exchange Volatility Index closed at 45.45, its highest level since 2008.

“With accentuated price movements in financial assets seemingly becoming the new norm, batched/end of day monitoring of portfolio exposures may no longer be as acceptable as it once was,” Dr. Mayiz Habbal, senior vice president of securities and investment at consulting firm Celent, said in a statement. “Companies need to invest in technologies that give them accurate visibility into the profitability of their portfolios.”

It was in response to these concerns that FINCAD developed F3 2.1, which offers an expanded array of tools for analyzing derivatives pricing from the individual trades to entire portfolios. With growth in collateral requirements and hybrid modelling, the platform integrates methods of accounting for nearly any type of contract. All of these functions can be performed on-demand, allowing for continuous monitoring of an institutions exposure.

Derivatives risk software firm FINCAD has offered students at the University of Connecticut the opportunity to use some of its most popular risk management products.

Spurred by one of UConn's business professors, the risk software firm offered the school access to its FINCAD Analytics Suite for Excel as part of its new Academic Endowment Program. Begun in June of this year, the program is designed to increase students' access to industry standard derivatives software, helping improve their own marketability and potentially improving risk management practices in the derivatives industry.

"Using industry standard software is instrumental in training students for their future professions and even for career advancement," Jud Saviskas, executive director of the UConn School of Business, said in a statement. "The FINCAD Academic Endowment Program has given [Master of Science in Financial Risk Management] students an excellent opportunity to ensure their software knowledge is what it should be in today's marketplace."

As risk management regulations are put in place around the world, familiarity with the software in that field becomes increasingly important for students. Common programs like Excel offer an easy opportunity to expose students to the concepts and some of the basic processes.

New research published by the TABB group finds that data levels may surge by nearly 400 percent once the OTC derivatives market reforms are implemented, reports Virtual Strategy Magazine.

The swaps market has never before had to deal with processing the amount of data produced by clearing, reporting, risk management and other processes mandated by last year's Dodd-Frank legislation. The TABB report gathered interviews with swaps dealers, exchanges, buy-side firms and clearinghouses, according to the news outlet.

Kevin McPartland, a principal at TABB, writes, "Just like equities, futures and options before them, OTC derivative market winners and losers will be determined by the strength and intelligence of their technology infrastructure."

Market participants will need to adjust their technology to comply with the data challenge. In 2011, participants in the OTC derivatives market will spend approximately $3.4 billion on just back-office and clearing technologies. Derivatives technology must be updated and firms will need to ensure they have appropriate data management strategies in place, according to the news source.

Regulators have been finalizing Dodd-Frank rules for months, though the law was passed last year.  

For the second time in six trading days, Borsa Italian's derivatives market had to cease trading on August 11. According to The Financial Times, the bourse reported that a technical error had made equity instruments on its derivatives arm, IDEM, un-tradeable.

The systems of many trading venues have been dealing with unprecedented volumes and data input. As global exchanges are trying to update their computer systems to be faster and more efficient, technical issues have become more prevalent in the past few months.

The Italian exchange, which is owned by the London Stock Exchange, has undergone difficulty recently, in part due to high trading volumes, according to the news outlet. Despite being owned by the LSE, the exchange has been using a different trading platform to London, through Canadian TMX Group-owned derivatives technology.

Italy's troubles echo technical glitches in other exchanges globally, including Chi-X Canada, NYSE Euronext and Nasdaq OMX, according to the August 11 report.

One week ago, the exchange experienced similar glitches, and had to suspend its MIB 30 index right before close, after giving no reason. Given the high volatility in recent weeks, the exchange also suspended trading on UniCredit, Fiat, Pirelli and Mediolanum, just a few of Italy's largest companies, according to an August 4 Financial Times piece. 

The Financial Times reports that the recent difficulties faced by derivatives exchanges illustrates the growing problem of dramatically expanding data flow in the finance sector.

The New York Stock Exchange saw a 90-minute outage on Thursday last week, as markets reacted to the U.S. debt deal and the country’s new negative credit outlook. The Financial Times reported that the exchange explained that the outage was due to high demand on its messaging system, one of the often overlooked aspects of the rapidly growing derivatives sector.

The Times cites numbers from Nanex suggesting the day after the outage set records for this digital stream with more than 130 million trades comprising more than 950 gigabytes of data. The average rate of messages last year ranged around 1.5 million per second, but that number reached as high as 5.3 million messages per second last week.

The problem has been exacerbated by high-frequency trading and increasing reliance on electronic platforms, as one head of electronic trading explained the growth of base data flow requires a proportional increase in maximum capacity.