4.1 TRADE-CENTRIC VIEW
The trade perspective that is most common these days is trade-centric. In this view, trades are the primary objects of interest. A trade-centric view is the reason that most trading systems index trades as the primary objects. By putting together a group of the primary objects (trades), we get a portfolio or folder. Put a few portfolios together and we get a book. The whole trading activity of the financial institution is merely a collection of books. This paradigm, which has served us well for a long time, represents the best compromise between different possible views.
Still, the trade-centric perspective is only a compromise. As we will see, the activities of the trading floor can be viewed from different angles. Each view corresponds to a paradigm and has its role in the bigger picture when it comes to designing the trading platform.
Regardless of the trade perspectives of the various business units, the trade-centric view is going to be implemented in any trading platform because trades are the primary units of work. However, this view does run into trouble when applied to structured products, which can be thought of as a composition of several simpler trades. The simpler trades, though necessary for booking and pricing the structures, are not the primary units, and consequently they have to carry along some identifying tag or attribute to link them together as one structure. Such considerations become vitally important during certain trade operations. ...