City Index, a London firm that specializes in bets on the movements of financial spreads and contracts for difference, has adopted a new service for monitoring its risks within each trading day.
The 28-year-old firm said it has gone live with the Algo Risk Service from Algorithmics, the risk management software supplier. City Index supports trades on financial spreads and CFDs by retail traders.
The firm executes more than 1.5 million trades every month, for customers in more than 50 countries.
City Index will use Algo Risk Service, a hosted risk management, portfolio analytics and decision support tool, to provide a holistic view of risk across the thousands of individual markets in which both City Index and its clients are active.
Dr Andrew Aziz, Executive Vice President of Buy-Side Risk Solutions at Algorithmics, said City Index would get risk analytics, reporting and portfolio construction services to help 'manage its internal capital and counterparty exposure.”
Spread betting is an alternative to conventional trading, which is free from stamp duty in the United Kingdom and capital gains tax. Investors can bet either long or short on the movement of financial spreads.
City Index offers prices on more than 12,000 spread betting markets.
CFD trading is free from stamp duty and enables a trader to go long or short on thousands of global markets
A CFD, or Contract for Difference, is an agreement between two parties to exchange the difference between the opening price and closing price of a contract.
CFDs are derivatives products that allows trading on live market price movements without actually owning the underlying instrument on which a contract is based.