An alchemical approach to brokerage

Abstract

The essence of the commodities business is the ability to react quickly to evolving market conditions. Mocatta, a N.Y. based bullion dealer, is a firm which uses its Data Processing to provide both front office (trading) flexibility and back-office capacity to handle large volume days. The business is characterized by the constant trade-off of time against money. Corporate philosophy is to spend money to react quickly rather than to react slowly but perhaps at lower costs. The life cycle of a system in this environment normally begins with a marketing report reflecting a new market nitch which the firm can take advantage of. Data Processing is involved almost from the inception of the idea to provide an indication of what existing systems can do for this new opportunity. Because of the nature of the business, each new product offered is usually so unique as to make it impossible for existing systems to support a new product from a trading point of view. Back-office applications are somewhat more common across products, so existing systems can usually provide some support. The key point is that all we really know is that we want to market the new product. Some idea of the time frame in which the product is to be offered is also obtained. The exact workings of defining the product and determining the parameters under which it will be traded usually remain to be worked out prior to the offering date. This therefore means that we have, at the point of commitment, the necessity for evolving data processing support in the same time frame in which the definition is evolving about what it is that we are to support.