Physically Held Commodities Best Practices

Owned by Jawann Swislow
Last updated: Aug 03, 2023 by Jawann Swislow
2 min read

Overview

The Eagle Suite provides rich functionality to model and process Physically Held Commodities such as precious metals (gold, silver, platinum). This document assumes that physically held commodities are valued and priced similarly to equities (in units of 1.00).

Reference Data

Physically Held Commodities are modeled as equities in Accounting. Equity security master records can be created using Issue Viewer, Security Reference Manager, or Reference Data Center (RDC). The list below contains all fields required to configure a Physically Held Commodity security master file (SMF).

  • Issue Name (961)

  • Primary Asset ID Type (1432)

  • Primary Asset ID (14)

  • Processing Security Type (3931) = EQCSCS (Common stock)

  • Issue Country (1418)

  • Asset Currency (85)

  • Settlement Currency (63)

  • Income Currency (1186)

  • Issue Tax Type (668)

  • Primary Exchange (17)

Example Security Setup

Entity Setup

There are no special entity configurations required to trade Physically Held Commodities modeled as equities.

Trade Processing

Physically Held Commodity buy and sell trades can be processed manually using the Book Trade module. The only required fields for buy transactions are:

  • Shares (40)

  • Price Per Share (45)

  • Broker (88)

Accounting

Once a Physically Held Commodity position has been established follow all core Eagle accounting processes.

Valuation

Market Value = Units * Price * Price Multiplier * Quantity Scale

Reporting

STAR to PACE (S2P)

Almost all reports in Eagle Accounting leverage data from Data Management, which is populated by the S2P process. This will be scheduled as part of the daily workflow, but can also be triggered manually as described in the Accounting section.

The S2P process creates a single row for each Physically Held Commodity in the POSITION, POSITION_DETAIL, TRADE, and CASH_ACTIVITY tables. The MARKET_VALUE_INCOME column captures the total market value.

Accounting Reports

Eagle has a core set of accounting reports that can be used to review Physically Held Commodity information. These are designed to support the daily operational workflow for business users, allowing Grid Reports to be easily exported to Excel and customized to provide additional details as needed. Advanced Reports are intended to be client-facing and do not provide the same level of customization.

Data Management Reporting

Performance

The performance toolkit has full functionality to calculate market value-based performance for Physically Held Commodities using data supplied by the S2P process. Risk and performance attribution features are available to analyze Fixed-to-Float Bond performance.

Automation

Eagle supports loading Physically Held Commodity SMFs and trades through standard Message Center streams. The SMF must be loaded prior to the trade (trades will not automatically spawn SMF records). Refer to Supported Generic Interfaces V17 for more information.