Default Message

Markit - The Totem Service™

Introduction

The Totem service, founded in 1997, provides the major market makers in OTC derivatives with definitive consensus market prices. More than 50 of the leading banks, trading houses and other investment professionals use the Totem service as the key independent check of their trading book valuations. The service encompasses the equity, interest rate, currency, commodity, credit and bond markets, providing comprehensive matrices of vanilla prices and a wide selection of exotic products.

Why use the Totem Service?

Authoritative
Accepted by auditors and regulators worldwide, the Totem Service enables institutions to ensure that they are accurately valuing their derivatives positions.

Regulatory Environment
Markit works closely with its contributing banks to ensure the valuations data satisfies the ever increasing regulatory and audit requirements for book valuations and day one P&L.

Monthly Accounts Sign-off
Rigorous independent checking of book valuations is a core regulatory requirement. The Totem Service specifically fulfils this need.

Industry Backing
As part of Markit, the Totem Service has the support of a leading group of partner banks.

Data Quality
The Totem Service employs a unique set of processes and techniques to ensure the consensus is a true reflection of the market. These controls are rigorously applied, and many submitted data points are double-checked with contributors before being accepted. Those points that fail are rejected.

Market Consensus
Totem data is made up of a consensus of mid-market prices from the leading market makers in each product along with information on the range of submissions and where the client is an outlier.

Market Expertise
Experienced market professionals provide vital support on pricing issues to product controllers and risk managers.

Equities

The vanilla service covers over 75 indices and over 600 stocks with maturities out as far as 15 years and strike ranges from 40% to 200%. Exotic derivatives coverage includes index, stock and currency correlations as well as more complex structures.

Structured Credit

The Totem Structured Credit Service provides a hands on review and feedback on correlation and volatility products. These include bespoke and index tranches, FTDs, CDO Squared and Credit Options.

Other services offered include Recovery Locks and a CDS quality analysis service.

Interest rates

Swaptions and caps/floors are comprehensively covered on all the major currencies and a number of emerging markets with final maturities extending as far as 70 years. Bermudans, inflation, quantos and structured derivatives are also covered in the key currencies.

Commodities

The commodities service offers the full range of products within the commodities spectrum – Energy, Softs and Metals.

Swaps and/or matrices of option prices are provided for well over 300 oil, gas, power, coal, freight, emissions and agricultural products in the Energy and Softs services. The Metals services offer valuations on forwards, ATMs and skew on the full range of precious and industrial metals.

An exotic service covering cross-commodity correlations, swaptions and index and options is also provided.

Currencies

The short dated service covers ATM volatilities and 10 & 25 delta skew out to 2 years on over 100 major and emerging market currency pairs, with ATM volatilities on a further 250 pairs. The medium / long term service encompasses over 40 pairs with maturities as far as 30 years for ATM volatilities and 10 & 25 delta skew. Exotic services covering barrier options and forward volatility agreements are also run.

Bonds

A comprehensive option matrix on major treasury stocks is provided.

Bespoke Valuations

Totem is able to capitalise on its relationships with the leading derivative market makers to provide one-off prices on derivatives.

Historical Data

Unique historical dataset of option prices of exceptional quality. This is often used for model testing and VAR calculations.

Typical Derivatives Trading Portfolio

Totem Coverage

Click here to register your interest in this product