I am trying to find out what Exotics Trade Capture entails. I can't find anything on Google that isn't a job posting, which is where I saw this term.

Say you did this for a living, how would you explain it to someone that didn't know anything about it?

What references on the internet would you point them to find out more information about it?

  • $\begingroup$ Do you have a reference or a context for this term? $\endgroup$ Jun 29 '12 at 15:29
  • $\begingroup$ I think you are confused. The only references I've seen to this term on google show it as two separate terms, exotics, and trade capture. Do you have a reference showing it as a single term? $\endgroup$ Jun 29 '12 at 16:10

From Wilmott:

Trade capture is the process of booking (or capturing) the trade into the systems used within a financial organisation. This may sometimes have to happen multiple times depending on the complexity of the trades and the ability of the systems to be able to capture the economic, non-economic and static details surrounding the deal.

The ideal situation is to STP (Straight through process) these deals from the point of execution through to all of the banks systems with no manual touch points. Obviously the more vanilla the product, and the greater the volume, the more automated it will be. FX and cash equity for example, is highly automated, with only "exceptions" manually handled. Listed equity derivative trading is now heavily automated/ STP, although not entirely. One of the expected outcomes of increased regulation/ standardisation of credit/rate trades will be not only to force them onto clearing houses and exchanges, but also to increase the opportunity for STPing these deals into the risk systems of the financial institutions. In fact, it will almost certainly be expected and required.

And from Wikipedia:

Exotic derivatives, in finance, refer to derivative instruments which have features making them more complex than commonly traded, "vanilla", products, usually relating to determination of payoff. The category may also include derivatives with a non-standard subject matter (i.e. underlying), developed for a particular client or a particular market.

Note that the term has no precise meaning: the definition is dependent on time and place. Interest rate- and currency-swaps were exotic when they first appeared in the 1980s, but are now standard financial tools. Similarly, proprietary products originally developed by merchant banks or other financial institutions to meet the needs of particular clients may in time diffuse more widely into the market.

"Exotics trade capture" would presumably mean trade capture of exotics.

  • $\begingroup$ thanks this is exactly what I was looking for, the first part was what I was having a hard time pinning down! $\endgroup$
    – user2620
    Jun 29 '12 at 16:45

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