Global Energy Trading & Risk Management Market: Overview
Energy trading and risk management (ETRM) is a category of software applications, frameworks, and tools that support business processes related to trading energy commodities. It consists of a set of functions that vary depending on which commodity is traded, assets that are used in the business, location of those assets, and company’s business strategy and business processes associated with the same.
The ETRM system is inclusive of trading requirements of a liberalized energy market and thus help market participants to carry out trade encompassing full range contracts across the globe. It also includes comprehensive risk management plan, event and trade identification, scheduling transportation, and settlement execution. Moreover, ETRM solutions provide consulting services for price transparency, market monitoring, and regulatory compliance.
The market study presents a granular analysis of the global ETRM market looking into market drivers, challenges, and growth trends to have a bearing on this market. The research phase included data collection from reliable sources, which was later scrutinized to present a satisfactory conclusion about the market’s growth between 2016 and 2024.
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Global Energy Trading & Risk Management Market: Trends and Opportunities
The global ETRM market is driven by the ability of ETRM to provide an end-to-end solution for the effective execution of energy trading activities. Furthermore, need for energy business to present significant returns and need to maintain an organization’s hedging portfolio are further boosting the ETRM market.
Moreover, ETRM solutions can alleviate the pitfalls associated with energy trading. Energy trading involves a high degree of risk and profitability margins are subject to fluctuations in the market. Complex supply chains, volatile prices of energy, evolving regulatory requirements are some of the major hurdles that players in the energy business are faced with. In this scenario, ETRM solution providers can use prove volatility to their advantage and design unique solutions that are unique to the business requirement of a firm. The other advantages of ETRM include its ability to record trading and equity data in an efficient manner as compared to manual recording, which is prone to errors.
However, lack of technical expertise is one of the key factors challenging the market’s growth. Nevertheless, rising financial risks and growth of major business organizations will extend growth opportunities to this market.
In terms of operations, the ETRM market can be segmented into front office, back office, and middle office. The front office carries out operations pertaining to deal capture, deal evaluation, position management, and price discovery. The middle office performs operations related to credit risk, enterprise risk, and market risk. The back office carries out accounting operations and conducts the inventory and derivative accounting tasks.
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Global Energy Trading & Risk Management Market: Competitive Landscape
Key players in the global ETRM market include Allegro Development Corporation, amphora Inc., Triple Point Technology Inc., Openlink LLC, and Eka Software Solutions.