Software That Takes The Dread Out Of Derivatives

In today's financial markets, banks, securities firms, and others are constantly coming up with complex new financial instruments, such as option swaps, mortgage-backed securities, and other so-called derivatives. One problem with derivatives is that complex software is needed to predict their future behavior and determine their value. Using standard methods, that software may take months to develop, by which time it's probably too late to be of any use.

To help, a Palo Alto (Calif.) company called C.ATS Software Inc. has come out with a scheme that creates new software for virtually any type of derivative in a matter of minutes. Called Financial Computer-Aided Design (FiCAD), it's based on a set of prefabricated software modules, called objects, that a developer using an engineering workstation can string together visually to do exactly what's needed. The objects embody frequently used financial calculations but can, through a series of menus and fill-in blanks, be individually tailored. C.ATS officials say that no traditional programming is required and that the finished programs can easily be modified.

Before it's here, it's on the Bloomberg Terminal.