Fairmat Cloud Help

1 How it works

1.1 Introduction

Fairmat Cloud is an on-demand, instantaneous pricing and risk engine, which will allow you to easily obtain assessments on several types of financial (derivative) products. At glance with Fairmat Cloud you can do the following:

Some of the features are free to use (just sign-up), some require Subscriptions and some works with pay-per-use method. Remember that Fairmat Cloud development is driven by you and hence your feedback is always very welcomed.

1.2 Certificates Browsing and Screening

We are mapping public structured products issued on several countries and for any structured retail product available in the primary or secondary market we offer a free independent product sheet Just search for the product ISIN. If you cannot find the product you are looking for please ask us to freely include it in the database.

If you need more sophisticated analyses and more insight data, you can use our advanced certificate screening tools. In order do that you must activate the access to at least one market (currently we track Germany, UK and Italy). For those markets we offer monthly plans (for just 19 credits equal to 85.50 Euros you can buy the access to one screening section for one single month) or yearly plans for 149 credits (equal to 596 Euros).

1.3 Contract Mapping

Alternatively if you are pricing an OTC or private contract you can search for a contract category (i.e. Autocall, Bond, Options on bonds), find a template and build up your structure by entering the relevant parameters (payment dates, thresholds, coupons). For an overwiew of what you can map into Fairmat Cloud please check our payouts mapping guide.

If you cannot find the template or the product you are looking for we can eventually help you in mapping your product into Fairmat Cloud, send us the term sheets and we will enter your OTCs in your private area.

1.4 Analytics Requesting

After you have determined the specification for your contract you can request the analytics you are interested in, and only pay for the valuations you need. Valuation cost is a multiple of a cost unit we call “Fairmat Credit”, and depends on the complication of the product (in terms of number of underlying assets and payoff complexity) and as well in terms of the analytics' complexity. Just to give you an example, the pricing cost for an equity structured product is one credit, while the pricing cost for an interest rate product is eleven credits.

You can also buy credits in advance if you plan to run more assessments. For example you may be interested in monitoring the mark-to-market for a product or a products portfolio. Buying “valuations credits” in advance allows you to obtain volume discounts and hence a cheaper cost per valuation. Volume discounts follow the table below:

Credits Requested Cost per Credit Total Cost
1 5,00 € 5,00 €
10 4,50 € 45,00 €
100 4,00 € 400,00 €
1000 3,00 € 3000,00 €
5000 2,00 € 10000,00 €
10000 1,50 € 15000,00 €
more custom contact us

Remember that valuation credits must be used within a one-year period from the date of purchase. Check out the Fairmat Cloud Service Terms for more details.

2 Available Analytics

2.1 Mark-to-Market

This analysis calculates the Mark-to-Market (MTM) value of the product also called fair value. Fairmat Cloud can also provide the historical MTM, therefore giving you an indication of how the market would have priced a certain instrument given the information available at the simulation date. See an example.

2.2 Greeks Derivatives

Greeks derivatives are the quantities representing the sensitivity of the price of a derivative contract to changes in underlying parameters such as spot values, volatility, interest rate and product's maturity.

2.3 Product Sensitivities

Derivatives products' prices usually exhibit a non-linear dependence from their defining parameters. This analytics quantifies the change in the mark-to-market with respect to changes of product's attributes. The valuation will generate several figures showing the theoretical price for different values of the product's attributes thus helping you to calibrate thresholds in order to reach expected product's target costs or to perform what-if analyses.

2.4 BackTesting and post-strike backtesting

Backtesting estimates the future performance of the product using historical records. This is done by analyzing the product performances by looking at what would have happened if this product would have been issued in the past: this procedure is repeated for several different issued dates and from that a distribution of historical performances can be computed. The product historical performances are also compared with an alternative investment as for example the investment on the market's benchmark index.

There are two different backtesting, the standard back testing, in which the investment is tested at several dates in the past as it would be at its strike date, is useful for a priory analyses, while the post-strike backtesting allows to analyse on-going products. The post-strike back testing accounts only for the remaining future payments and uses the underlying history from strike date to valuation date to take into account state dependency (as for example coupon accumulators or American barriers). See an example.

2.5 Independent Quantitative Report - Product Testing

This analytics generates a report which can help you in assessing the convenience of investing in a structured product. Inspired by IOSCO guidelines, the report is generated using only quantitative information available in the market with the goals of not being biased and being independent. It contains market-consistent forward-looking analytics such as expected returns, tail risk scenario analysis, probabilistic comparison with an alternative investment and historical back-testing.

This report is available in two different usage terms: for personal use only or for redistribution purposes. In the latter case you can also white-label it. See an example.

3 Customizations and Work Groups

3.1 Work Groups

By default all the contracts you define within Fairmat Cloud are stored in your private area and are visible only within your account. Nevertheless, if you work in a larger organization and you have to assess larger portfolios, it may be convenient to share your contracts with your peers. Contact us and we will setup a private work group in which contracts and available valuation credits can be shared within your organization.

3.2 Customizations

We know that every customer might have special needs hence we designed our product in order to customize analytics and with the possibility of integrating it to other system through web services. Contact us to know more.