An ETRM system is the software an energy trading firm uses to record every trade and work out what follows from it. ETRM stands for energy trading and risk management. The system holds the firm's official record of what it has bought and sold, and from that record it produces positions, profit and loss, risk figures, delivery schedules and invoices.
This guide explains what an ETRM system does, where it stops, who sells one, and what trading desks build around it. It is written for engineers, analysts and anyone joining a desk for the first time.
What an ETRM system does
A trade is a contract: a quantity of a commodity, at a price, for delivery at a place over a period. The ETRM records that contract and then follows it through its life.
| Function | What the system does | Who relies on it |
|---|---|---|
| Deal capture | Records each trade: counterparty, product, volume, price, delivery period and book | Traders |
| Confirmation | Matches the trade with the counterparty or broker, so both sides agree what was done | Operations |
| Position | Adds the trades up into net volume by product, location and delivery period | Traders, risk |
| Valuation | Marks each open trade against the forward curve to give mark-to-market P&L | Traders, product control |
| Risk | Measures market exposure, value at risk and limits, and credit exposure by counterparty | Risk |
| Scheduling | Turns trades into physical delivery: power notifications and gas nominations | Schedulers |
| Settlement | Works out what is owed, raises invoices and checks them against the counterparty's | Back office, finance |
| Reporting | Feeds the accounts and the regulatory reports, such as REMIT and EMIR | Finance, compliance |
Two of these have their own guides. Position aggregation and delta exposure explains how trades add up into a position. Mark-to-market P&L explains the valuation.
Front, middle and back office
The table reads from top to bottom as a trade's journey through the firm.
- Front office does the trade and watches the position and P&L.
- Middle office checks the valuation, measures the risk and holds the desk to its limits.
- Back office confirms, settles and accounts for the trade.
The value of one system is that all three read the same record. When the trader's position, the risk report and the invoice come from the same trade, they agree. When they come from three spreadsheets, somebody spends the month finding out why they do not.
ETRM and CTRM
CTRM stands for commodity trading and risk management. It is the wider term, and covers metals, agricultural products and other commodities as well as energy. An ETRM is a CTRM built for energy, and energy brings problems the others do not have:
- Power cannot be stored at scale, so it is traded and settled in short periods: half-hours in Great Britain. A year of baseload power is thousands of separate deliveries.
- Delivery runs through a network. Power and gas have to be scheduled with the system operator, with their own deadlines and penalties for imbalance.
- Shape matters. A contract for peak hours is a different product from one for every hour, and the system has to price and aggregate both.
Vendors use the two terms loosely, and many products are sold as both.
What an ETRM system does not do
The ETRM records and calculates. It does not decide. It has no view on whether a trade was a good one, and it knows only what it is told.
Several things a desk needs usually sit outside it:
- Execution. Traders deal on exchange and broker screens; the trade reaches the ETRM afterwards, by a feed or by hand.
- Forecasting. Demand, wind, solar and price forecasts come from separate models.
- Optimisation. Deciding how to run a battery, a gas plant or a storage site is a different kind of software.
- Short-term and algorithmic trading. Intraday power moves faster than most ETRM systems were designed for, so desks run purpose-built tools beside them.
- Analytics. The questions traders ask change every week. Most are answered in Python and dashboards built on the ETRM's data.
This is why the ETRM is the centre of a desk's software and never the whole of it. Energy Trading 101 describes the wider energy trading software stack, with a worked example of a wind forecasting pipeline.
The main ETRM systems
These are some of the established products, and some of the newer ones. The list is not complete, and it is not a ranking.
| Vendor | Product | How the vendor describes it |
|---|---|---|
| ION | Openlink (long known as Endur), Allegro, RightAngle | Openlink is the multi-commodity system; Allegro is aimed at utilities and energy companies; RightAngle at liquid hydrocarbons |
| FIS | Energy Trading, Risk and Logistics Platform (formerly Aligne) | A cloud-native ETRM for gas, power and other energy commodities |
| Hitachi Energy | TRMTracker | Trade capture through to settlement, with regulatory reporting |
| Brady Technologies | Igloo, PowerDesk | Igloo is a SaaS ETRM; PowerDesk is for intraday and day-ahead power trading |
| Molecule | Molecule | A cloud-native ETRM and CTRM |
| Qualia | Qualia | A cloud-native ETRM, described as "AI native" |
Vendor and product names were checked against each vendor's own website on 9 November 2026. Products are renamed and vendors are bought, so check before relying on this table.
Buy, build or both
A firm has three choices.
- Buy. A vendor system brings years of accumulated logic for contracts, settlement and regulation. It also brings a licence fee, and an implementation project that can run for years at a large firm.
- Build. Some large trading houses write their own. They get exactly what they need, and they carry the cost of maintaining it for ever.
- Both. Most desks end up here: a bought or built system of record, and their own software around it for the things that give them an edge.
Small desks often start with spreadsheets. That works until the number of trades, or the first audit, makes one record necessary.
Common questions
Can an ETRM system calculate position and exposure? Yes. Position is one of its core outputs: net volume by product, location and delivery period, and the price exposure that follows from it.
What risk reports does an ETRM provide? Typically mark-to-market P&L, position against limits, value at risk and counterparty credit exposure. Each firm decides which reports its risk team runs daily.
Does an ETRM implementation need technical people? Yes, and it needs people who know the market more. The hard part is rarely the software. It is deciding how the firm's contracts, books and curves should be modelled in it.
What to learn if you work with one
Every ETRM models the same things: trades, books, counterparties, curves and delivery periods. Learn those and any system makes sense. Learn only the screens of one product and the knowledge stops at that product. We make that argument in full in why market knowledge beats ETRM skills.
If you are looking for ETRM training, start with the trade and not the tool. Our Energy Trading Fundamentals course follows a trade through position, P&L, risk and settlement, which is the same journey as the table above.
For the job of specifying what an ETRM must do, see the ETRM business analyst career roadmap.