Team C Ryan Eavy Kiril Gantchev Scott Krasnigor Ljubomir Krispinovic Scott Noorthoek Chris Sharp STARS Social Trading Aggregation and Risk System

The Team Ryan Eavy – Lead Developer 10+ years professional experience working in the financial field as a Software Architect/Engineer Kiril Gantchev – Lead Tester 3+ years professional experience working in the financial field as a Developer and a Tester Scott Krasnigor – Developer 16+ years professional experience in weapon system design, development and testing

The Team (cont.) Ljubomir Krispinovic – Business Analyst 2+ years professional experience working in the financial field as a Asset Manager Scott Noorthoek – Business Analyst 6+ years professional experience working in the financial field as a Trader Chris Sharp – Project Manager 9+ years professional experience working for internationally recognized companies

Presentation Overview Concept behind the Prototype System Context Diagram Architecture Diagrams Prototype Demonstration Test Cases Extensions & Additional Capabilities

The Concept Our system maintains the basic tenets of risk management, i.e. stress testing and middle office monitoring, while engaging firm-wide social interaction to achieve more effective risk assessment. The creation of a social mill provides a means to collect, aggregate and publish trade data to the community. The additional transparency it provides will minimize trader and portfolio risk by increasing market awareness, assisting in training of traders, and facilitate idea generation. The removal of communication barriers allows firms implementing our system to more efficiently utilize the trading talent they possess, which in turn will lead to higher profitability and return per unit of risk.

System Context – STARS Financial Calculations Theoretical Pricing Greeks Performance Management Risk – Scenario Analysis Portfolio Management Performance Metrics Market Data Handling External Market Feed Handling Social Media Metric Aggregation Event Grouping Discovery

Architecture – Layers Presentation Layer User interfaces Dashboards Front, Middle Office Admin Transport Layer System and Client communications Service Layer System components (e.g. Risk management, Market Data, etc.) Data Access Layer Access fabric (APIs, frameworks Database Exchange Data

Architecture – Application Service Architecture Transport Handling Inbound / Outbound Conversation Handling Routing Layer Routes data to appropriate transport and service handler Service Container Dynamic loading of services, hosts the plug-in architecture Persistence / Query Framework Common access framework to database for persistence and query

Architecture – Availability

Architecture – Message Flow

Prototype Demonstration

System Startup Risk Engine Calculation Engine Data Feed Engine Social Mill Services Trader UI Administrator UI GUIs

GUI Login

System Status

Test Cases – Admin

Test Cases – Trader

Extensions & Additional Capabilities Trader User Interface Further develop the charting capabilities Provide chart with Greeks showing how they are allocated across strikes Provide 3 dimensional volatility surface view to improve perception of levels and term structure Interactive charting with ability to customize charts with a variety of options such as moving averages, Bollinger bands, volume, etc. Create interactive trader user interface to allow options re-pricing by adjusting volatility levels

Extensions & Additional Capabilities (cont.) Trader User Interface (cont.) Display multiple internal volatility indices based on the firm’s traders Aggregating volatility perception across the firm would price the index Traders could share their market views collectively by constructing these indices Gives the middle office the ability to manage risk more efficiently Implement a heat map for tag activity Cluster tags by sectors, which are organized so each stock is cast into one sector Sectors are ranked in the map based on activity Hot stocks within each sector are ranked accordingly Color coded so various colors represent various levels of activity

Extensions & Additional Capabilities (cont.) Trader Profiles Ability to communication with traders directly through their profiles on the user interface. The social aspect of the tags would further enhanced by allowing traders to interact throughout the day. Risk Manager Covariance matrix for scenario testing Enables middle office to monitor exposure and receive indications where risks can offset Allows risk management to advise various traders where they could collaborate to lower and diversify risk.

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