Trading Case Study: Large U.S Investment Bank Licenses JSP to Optimize Their MBS Trading Desk Operations

Client’s Challenge

  • The client, a large U.S investment bank, wanted to improve their fixed income trading operations. Their trading desk staff were using multiple systems and manual processes to conduct due diligence on structured products.
  • The client was in need of forwardlooking price and yield analytics tools with improved granularity to make more informed trading decisions. Five Bridges approached the client regarding our RMBS analytics platform,Javelin for Structured Products (JSP).

 

Our Solution

  • The client’s trading desk staff were in need of analytics that gave them the power to assess market prices and yields for RMBS for userdefined settlement dates. JSP’s valuation tools give users the ability to choose any settlement date for price/yield forecasting.
  • The client also required loan– and portfolio level valuations.  By leveraging JSP, client users had the ability to do both loanlevel and portfolio level price/yield forecasting.
  • In addition, JSP’s valuation reporting tools generate a “reasonable” market value price range which further assisted the client’s trading desk in making more informed trades.

Outcome

  • With the deployment of JSP, traders were able to effectively utilize one system for seamless process without accessing multiple systems and manual process, resulting in quicker analysis.
  • By leveraging JSP’s forwardlooking valuation analytics at multiple levels of granularity, the client’s fixed income trading team was able to make more informed trading decisions for their RMBS portfolio.
  • This enhanced knowledge of the whole loan trading market helped create more favorable spreads for the client’s trading desk staff, and in turn improved profitability for the firm.