A SMALL CALIFORNIA software company has introduced a new version of its derivatives trading software that offers expanded support for fixed-income hedging strategies.
With nearly 50 employees and 12 clients, privately held Infinity International Financial Technology Inc. of Mountain View is among the small but growing coterie of vendors of software for trading in fixed-income derivatives.
These companies have sprung up over the past seven years to meet rising demand for software to help banks and other financial firms support their booming interest rate swaps businesses.
Though small, Infinity's client list includes some notable names, such as ABN Amro Bank in Chicago, Sanwa Bank in New York, Bank of Montreal, and the London-based merchant bank Baring Brothers & Co.
These banks use one or more of the products in Infinity's Montage line of software.
This product line includes development tools to help firms build their own derivatives trading applications, a relational data base model to help banks keep track of their fixed-income derivatives portfolios, and applications for pricing, hedging, and analyzing portfolios.
Version 3.5 of the Montage line of software was made generally available this month. The major enhancements include support for instruments widely used to hedge fixed-income derivatives portfolios and to fund trades.
This includes support for swaptions, or options to enter into an interest rate swap. Also included are support for money market futures, such as the Eurodollar future traded on the Chicago Mercantile Exchange. And the software supports foreign exchange spot, forward, and swap trades.
Lotus Spreadsheet Feature
The enchanced software also has a feature that makes it easier to move information into Lotus Development Corp.'s 1-2-3 spreadsheet software.
"This is important for our company," said Charles Marston, an Infinity vice president for product development, about the new Montage releases. "It rounds out what firms would use for hedging and cash management."
One bank that is happy about the upgrade is ABN Amro.
ABN Amro Able to Pare Software
Mark Daniels, a vice president in the bank's treasury risk control department, said that the upgraded version of the Montage software will make it possible for ABN Amro to use one software package to operate all of its major fixed-income derivatives trading functions.
This should help the bank improve its global risk management, he said.
ABN Amro bought the Montage software at the beginning of the year, and began using it in September, Mr. Daniels added.