Portfolio of Keith ElderTradeweb - A $5.5-Million Dollar Annual Hedge Cost Avoidance for Rocket Exchange
by Keith Elder
🚀 Breaking News from the Galactic Guild of Software Sorcery! 🌌
The Elder Scrolls interstellar team is over the moon (literally, they’ve been doing zero-gravity backflips) because the Tradeweb Project is about to blast off AHEAD OF SCHEDULE! 🌠
Picture this: our intrepid crew of code astronauts has spent months tinkering with their cosmic keyboards, fueled by copious amounts of rocket fuel (read: coffee), to bring you TBA Pricing in real-time from Tradeweb. Say goodbye to the old, clunky Bloomberg—it’s like swapping your rusty lunar rover for a sleek, warp-speed spaceship. 🚀
But wait, there’s more! 🌟 While juggling moon rocks and debugging quantum quasars, our team hunted down elusive edge cases like cosmic scavengers. They also gave the QTrade Pricing Monitor and QTrade Source Selection screens a makeover to work with Tradeweb.🌐
And get this: they built new services and infrastructure to support Tradeweb while deciphering a 104-page intergalactic manual. Yes, you heard right—104 pages! That’s like reading the entire Encyclopedia Galactica while riding a comet. 📚
But wait, there’s more (again)! 🌠 Justin Kienle, our resident stardust whisperer, pulled double duty. Not only did he wrangle cosmic data, but he also moonlighted as a Data Strategy Jedi. 🌟 Meanwhile, Jon Carline—our AI guru—was busy plotting neural network constellations for our AI Adoption Strategy. 🤖
And now, a transmission from our cosmic captain, Keith Elder: “Last year, we kicked off 2023 with a supernova-sized bang, introducing Durations and launching Rocket Exchange. Honestly, I thought we’d peaked—like reaching the event horizon of a black hole. But guess what? It’s 2024, and we’re about to unleash Tradeweb, our latest starship. Writing software is a team sport, my fellow spacefarers. Our crew collaborates like binary stars, plans like interplanetary voyagers, and communicates like pulsars sending cosmic tweets. We’re setting the bar so high, even the Andromeda Codex is impressed!” 🌟
So there you have it, fellow space travelers. Buckle up, adjust your warp drives, and prepare for liftoff. Tradeweb awaits, and the universe won’t know what hit it! 🌌🚀
Disclaimer: No actual moons were harmed during the making of this announcement. Rocket Technology accepts no liability for cosmic giggles, wormhole mishaps, or sudden cravings for moon cheese.
Improved TBA Pricing with Tradeweb
In the fall of 2023 our team embarked on an initiative to integrate with Tradeweb. Tradeweb is the go-to source for TBA prices. By integrating our processes with Tradeweb, Capital Markets users can seamlessly capture and approve accurate, real-time TBA prices. This is crucial for generating accurate Rate Sheets and effectively hedging our loan pipeline. The project was a success and we are now capturing and approving accurate, real-time TBA prices from Tradeweb. The project has resulted in a $5.5-million dollar annual hedge cost avoidance for our business. This is a huge win for the company and I'm proud of the team for their hard work and dedication to making this project a success. This project is a great example of how we are building a rock solid foundation for the future of Rocket Exchange.
The Problem
Capital Markets' reliance on Bloomberg for TBA market data became problematic recently due to inaccuracies and unreliability in the provided TBA prices. Immediate action was required to mitigate the potential financial impact.
What are TBAs and Hedging Strategies?
Capital Markets employs strategies called hedging to shield itself from market interest rate risk on rate-locked loans. Through trading TBAs (To-Be-Announced), which are contracts for the future purchase or sale of mortgage-backed securities (MBS), our profitability is protected.
The Hypothesis
By integrating with Tradeweb, Capital Markets users can seamlessly capture and approve accurate, real-time TBA prices from the go-to source for TBA prices. This is crucial for generating accurate Rate Sheets and effectively hedging our loan pipeline.
The Outcome
By implementing Tradeweb TBA Pricing, we anticipate annual hedge cost avoidance of $5.5 million, with an additional $120k in annual tech savings.