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Forward Curves, Part 3: How Do Curve Building Tools Work?

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In our previous blog, Why Do Traders Need Forward Curves?, we identified some of the challenges that are faced when traders are trying to predict prices in the future.

Curve building tools, such as CurveBuilder from Enverus, can automatically calculate and generate forward curves based upon multiple numerical inputs, through a very simple user interface.

Once the user has set up the curve calculation logic, it will automatically create the forward curve on the desired basis (hourly, daily, etc.)

A monitoring view allows one to easily check if all curve calculations succeeded or if errors occurred. It has an in-built graphical tool to view your curves and export values to excel.

You can also setup quality checks on curves and see if any failed. For example, we may want to monitor percentage changes in the monthly tenors or we may want to check for gaps in the curve. From our workflow tool integrated with CurveBuilder, you can set up email notifications of the status of the curve and validations.

CurveBuilder also gives you the ability to set up how you would like your curves to be built. Most of our clients use the auto build, where curves are automatically built as soon as the daily settlement prices are published. You could also schedule your curves to run at set times in the day for business or technical reasons. You can also build curves in real time based on live data from Trayport, Refinitiv, Bloomberg, ICE and CME.

CurveBuilder also simplifies unit and currency conversion for your data. For example, NBP contract is natively in £/Therms; but if you wanted to view it in €/MWh, then it’s easy to set the currency and unit on your NBP curve to a different one from the underlying futures instrument and CurveBuilder will automatically do the conversion. CurveBuilder also allows you to define your rounding method and decimal precision for those contracts you may have that specifies the precision of the prices.

CurveBuilder comes with APIs that make it simple for you to feed them into your downstream systems like ETRM or ERP. We also have out-of-the-box adaptors to make the integration quick and seamless. You may have instances where price corrections are issued; CurveBuilder will automatically re-run your curve if the curves are set to auto build, and then feed the new curves downstream.

CurveBuilder also allows traders to upload their marks. Traders may want to upload their marks to the central repository and compare to a benchmark for example. Our Excel plug-in allows traders to consume forward curves in Excel and then upload data from Excel to the trader mark and view the uploaded data in MarketView, our front-end system for traders.

In essence we make creating, managing and maintaining curves simple so you can focus on what’s important to you — trading!

Learn more about how Enverus’ CurveBuilder can revolutionize your forward curve management today.

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Yousuf joined Enverus in 2021 and manages a portfolio of products. He brings more than 15 years of experience in trading, risk, regulatory and settlement, in both financial services and commodity industries. Yousuf works with a cross-functional team to enhance and grow our suite of market data and curve building applications to meet the challenging needs of our customers. Yousuf is responsible for the vision, strategy and roadmap of the DataManager and CurveBuilder applications.