Understanding market price exposure is about recognizing where and how market forces can impact your bottom line – and helping you control that impact instead of being controlled by it.
What are possible risks during a commodity trade, and can we do something about them? Yes, we can. Agiblocks offers innovative capabilities to show you your position management and mark-to-market in real time, in just a few clicks. What’s more, we’ve added several interesting new features since our last big update.
Executive summary: Mark to Market has been overhauled in Agiblocks v4.48.1 (and later versions) –transforming commodity trading risk management by delivering real-time, actionable insights into your positions and P&L.
- Immediate P&L clarity: Agiblocks enables you to instantly access both realized and unrealized P&L, providing a clear view of current exposures and asset values across all physical and derivative positions.
- Risk control, not just reporting: The platform empowers you to proactively manage market price exposure—leveraging hedging strategies, dynamic pricing, and supplier diversification to align risk with business objectives.
- Efficiency through innovation:
- Recent updates eliminate the need for daily database snapshots. Agiblocks now tracks only changes, delivering instant daily comparisons, with better performance, which reduce the time and effort to perform historical analysis.
- Automation and streamlined workflows mean less time spent on manual processes and more time focused on strategic decisions. Month-end and ad hoc reporting are now faster and more flexible.
- Comprehensive, user-friendly: All asset history is tracked automatically, ensuring transparency, agility, and better risk management across the organization.
Bottom line: the enhanced mark-to-market capabilities in Agiblocks deliver the speed, clarity, and control to help you optimize trading performance and manage risk in today’s volatile markets.
Commodity trading comes with constant price fluctuations, shifting supply and demand, and a wide range of risks. To manage that, traders rely on two essential views: position management and mark-to-market. Position management provides clarity on quantities, such as how much you are long or short, how much is bought, sold, or to be covered and when. Mark-to-market takes it a step further by revaluing those positions against current prices. Together, they give you the full picture: not only where you stand in terms of physical and derivative contracts, but also what those positions are worth today. The M2M process for you is now faster and more efficient with recent Agiblocks releases, that have also greatly improved possibilities.
Assets past and present
“Mark to Market and P&L Insight are two separate tiles on the Agiblocks dashboard that provide access to this information”, Joep Wijers, CTO and co-founder of Agiboo explains. “The first one has the filters set by default to get only unrealized assets, and the second one only realized assets. But both are the same screen and can be filtered in any way. It represents all past and present assets of the company. Once an asset changes from unrealized to realized, the system will set a field realization date on it, and it will freeze the market value as per that date (‘no longer follow further market movements’), where – to be clear – realized typically means that goods were delivered or transferred to a buyer. sold or a forward obligation to deliver goods (sales contract) was fulfilled.”
Market price exposure
Position management is only about quantities, whereas mark-to-market is also all about the financial values of those quantities. Managing market price exposure usually involves a combination of strategic and financial approaches. Companies may hedge through derivatives like futures or options to eliminate P&L swings due to changing markets. Joep states that “When trading commodities that are quoted on a futures market, the essence of your position (on the Market tab of the screen) is the risk of market exposure; If you are either short or long (the balance of quantities is negative or positive) then it means you are exposed to market risk; if the market goes down while you are long, it means your P&L goes down proportional to the quantity that you are long, and when the market goes up while you are short, your P&L also goes down proportional to the quantity you are short. If you are fully hedged, your P&L movements on one side are compensated by P&L movements on the other side; your unrealized P&L is stable and will eventually predict the realized P&L.
“So, position is a direct metric for market risk exposure. On the deliveries tab of the position screen, we look at a different type of long/short, not measured against the market, but measured against your forward obligations to deliver in specific calendar months. If you are short of deliveries that are four months in the future, you will need to engage in purchases that you receive on time, or else you will fail to meet your obligations. If you are long for deliveries that are three months in the future, you need to start selling, or prepare to take the costs of carry, the cost of stocking the goods for one or two months until you can sell it against your short position in those months.”
Mark to Market in Agiblocks
Mark-to-market in Agiblocks considers all assets: physical inventory, derivative contracts such as options, futures, and OTCs, and so on. It allows you to quickly grasp your overall (unrealized) P&L, grouped by commodity or even by counterparty.
In practice, you can quickly revalue your entire portfolio against prevailing market prices, taking into account premiums, freight, insurance, and other costs using Agiblocks. The result is an up-to-date view of what your positions are worth right now, not just what they were worth when the deal was struck. That unrealized P&L is one of the most important numbers in risk management. Hedging strategies with futures, swaps, or options aim to keep that unrealized P&L stable, and Agiblocks provides the transparency you need to understand where value changes originate.
You can zoom in on specific assets, compare values across markets and exchanges, and include location premiums or quality differentials to arrive at a realistic valuation.
What’s new in Agiblocks?
Mark to market is not a new tool. You probably wouldn’t be here if the value of your unrealized P&L wasn’t on your mind already. What’s new in Agiblocks is how all of this information is managed and presented.
In earlier versions, creating a daily (or weekly, monthly) mark-to-market comparison required storing entire “snapshots” of the database – effectively copying all your assets every single day. Over time, this approach produced enormous datasets, slowing down workflows and forcing traders to spend valuable time waiting for reports to run.
That process has now been transformed, or rather automated. Now, you no longer need to take snapshots (that build massive repositories of nearly identical backups), because Agiblocks takes care of that for you. While you still retain the ability to drill down and view the history of changes for any given asset, the system now stores only what has actually changed. The dataset is far more compact, which makes it faster, more efficient, and perfectly suited for automated processing.
In practice, this means:
- Your unrealized P&L is automatically updated;
- Daily comparisons are available instantly, without manual copying of data;
- Performance is much better, while historical changes remain easy to trace.
Now, while the storage aspect is interesting although a bit on the technical side, the actual gains from a business perspective are far more compelling. First of all, the daily history of all assets is now tracked automatically. Moreover, if you were not using daily snapshots so far, now you can – suddenly, ad hoc, and without any effort – decide to look back at how your assets looked for example three days ago, and compare them with today’s values. Meanwhile, the actual time involved in creating a snapshot is eliminated from their daily or monthly chores, allowing month-end processes to be much faster as well.
With these improvements, mark-to-market in Agiblocks has become both more powerful and more user-friendly. You get the same comprehensive picture of your positions, but now updated automatically in the background by a scheduler that takes care of the heavy lifting for you. The result is significant time savings, faster access to insights, and more flexibility in how you manage risk.
Find out for yourself
Agiboo’s philosophy has always been to make the complex world of commodity trading clear and accessible. With the latest updates to mark-to-market, Agiblocks does exactly that: it turns a once time-consuming, data-heavy process into an automatic, streamlined part of your daily workflow, so that traders, accountants, and risk managers can focus on what really matters – making the right decisions.
Ready to transform how you manage your trading positions? Let’s talk about how modern CTRM solutions can help you achieve better position visibility and control.
