Wall Street Firms Using CEP to Measure and Manage Risk

New complex event processing applications promise to help firms get a better handle on their risk exposure, but can CEP erase Wall Street’s risk management woes.

by Penny Crosman, Wallstreet & Technology.com

One of the many effects of the credit crisis is that Wall Street firms have found a new focus for their complex event processing projects. Although they’re not abandoning CEP-based algorithmic trading, new CEP initiatives are focused on measuring and managing risk.

With its ability to watch and apply business rules to massive streams of fast-moving data — such as trade quotes, trade orders and news — CEP can help traders and risk managers gain a clearer view of  counterparty risks, judge exposures to certain firms and sectors, and perform backtesting in close to real time, according to experts. And once links to data sources have been built and basic functions  described, building new risk applications on top of a CEP platform can be much faster than creating a new application from scratch.    Article