Risk Management

Risk management is a structured approach to monitoring, measuring, and managing exposures to reduce the potential impact of an uncertain event happening.

Our products are designed to encompass four critical steps for effective market risk management:

1. Empower risk management with control of the oversight process and support of the CEO/CIO.

2. Ensure excellent reporting so that risk management always knows accurate information and disseminates it quickly.

3. Build analytical tools that are powerful and easy to use, and that enable a common language about risk measures.

4. Understand in detail how the portfolio would perform under stressed market conditions, recognizing that risk in the future is not necessarily the same as in the past.

For market risk management, we rely on a proprietary set of extreme market stresses (which we call "Capital at Risk" or CaR). The stresses are designed to capture the P&L under "worst-of-worst" market moves across strategies and asset types. We simulate these moves from the bottom-up, Omega Replica Watches subjecting each position to each stress. This enables us to drill into the resulting P&L -- down to the level of specific trades.

[excerpts from talk of Dmitry Green is the head of market risk at Blue Mountain Capital Management]