TheBooks

A commodity trading advisor sells a very plain thing, a risk-adjusted return, and the vendor of TheBooks argues that what separates one advisor from another is how clients are handled, including when returns disappoint. TheBooks is software from DMAXX for the back office that stands behind that service. It is built for firms that trade futures, and the maker says traders, not bookkeepers, were the starting point, and that it is not a stand-alone accounting system.

Why managed accounts complicate things

Large allocations to alternative investment managers now arrive as managed accounts. That brings block trades, allocation of fill prices, several clearing relationships, give-up reporting and more counterparties, none of which a single fund has to deal with. TheBooks puts accounting and performance reporting inside the trading process itself, so these tasks are not handled in separate systems.

The components

The trade management module automates creating, placing, filling and reporting trades and notifying counterparties, and works with the popular execution platforms. A reconciliation module compares trade confirmations, open positions, commissions and cash balances with clearing brokers, tracks open breaks and prepares break sheets for the brokers. Real-time trade matching keeps positions current, can produce roll trades, exit trades and reversals, and generates trades for account opens, closes, additions and redemptions, with positions kept by system when several are traded.

The accounting engine is multi-currency and tailored to advisors with managed accounts, accruing commissions and fees, with management fees, incentive fees and interest worked out by formula. Reporting is delivered in a web browser or by email and covers intra-day performance valued on the tick, historic figures and standard performance tables, plus value at risk, scenario analysis and exposure, with the option to export to Excel and to test a hypothetical portfolio.

Market data and execution

A data manager stores price data from many vendors in one format, with continuous contract building and an automatic daily download, which the maker describes as suited to systematic traders. Real-time prices can come from DTN and CQG, and end-of-day prices from those two, CSI, Yahoo, any Excel sheet, text files or brokerage statements. A trading desk extension can route trades to exchanges or trading platforms and supports FIX-drop trade capture.

Who uses it

Its stated customers are advisors, funds and pool operators in the futures world who run managed accounts. The vendor says it surveyed customers to learn why firms use TheBooks as the center of their operating software.

TheBooks is software from DMAXX that combines trading operations with accounting for firms managing futures accounts. It was designed with the trader in mind and builds accounting and performance reporting into the trading process itself.

Main features

• Trade management: creating, placing, filling and reporting trades, with counterparty notification.
• Reconciliation: matches confirmations, open positions, commissions and cash with clearing brokers.
• Multi-currency accounting: handles fee accruals and formula-based management and incentive fees.
• Performance and risk reporting: intra-day figures, value at risk and scenario analysis.
• Market data repository: price data gathered from several vendors.

Customers and markets

Commodity trading advisors, hedge funds and commodity pool operators running managed accounts.

Key facts

• Vendor: DMAXX, LLC.
• Reports: delivered through a web browser or emailed automatically.