Recent developments in the global crude oil markets, particularly rising tensions in the producing regions of the Middle East, have spurred the return of high levels of volatility to the crude and crude products markets.

However, this volatility is impacting not only oil and its derived products. It is, much like the period prior to the market collapse of July 2008, driving price increases and heightened volatility across much of the wider commodity complex.

For traders, these conditions have again focused attention on the critical systems that record their activities and support their market decisions; the commodity trading and risk management (CTRM) systems.

It is these CTRM systems that provide the necessary analysis and decision support that enable traders to not only react to the continuous ebb and flow of commodity prices, but also plot strategies when faced with market shocks of the magnitude that have been experienced recently.

Unfortunately, many traders have discovered that as they develop new strategies, including expanding their portfolios of traded products and commodities in order to diversify risk, their CTRM systems are not capable of supporting those new activities and markets.

Additionally, as the relative value of each trade increases with the rising prices, pre-trade analysis and valuation becomes even more critical to the decision making process and expose further weaknesses in their systems.

A study by CommodityPoint examines the critical issues faced by traders in today's increasingly volatile markets and explores how the latest generation of ETRM/CTRM systems can help mitigate many these risks via real-time position management, comprehensive metrics, and simulations.

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