Obinna Dike of Citi - Part Two of Understanding Securities Lending

If you read “Obinna Dike of Citi: Part One of Understanding Securities Lending,” you’re likely eager to get into the meat of it. Now that you understand how those like Citi’s Obinna Dike begin the process, the steps used to profit from and end the exchange are integral to understanding the spirit of securities lending.

After the securities transfer, the following steps typically take place…

Investment of cash collateral typically follows the transfer of security transfer. Any interest collected on cash collateral will be split according to the terms agreement; non-cash collateral is not reinvested.

Daily mark-to-markets are used by the lending agent to adjust the collateral based on the current market value. This ensures that the lender is protected and that the buyer’s collateral adequately covers the loan.

Security return takes place when the lending period ends, after the borrower has used the loan to turn a profit through short selling.

Loan closure is completed when the collateral, including any agreed-upon interest, is returned to the buyer.

Payment of loan earnings is the final step of securities lending. All earnings from the investment, minus the borrower’s rebate from interest, are divided appropriately, determined by the agreed-upon fee split written during the term-negotiation step.

Obinna Dike of Citi is among the millions around the world who are involved in securities lending. If you would like to get started, contact an involved party in your area for more information.

If you missed “Obinna Dike of Citi: Part One of Understanding Securities Lending,” take a peek to understand the five steps that precede the investment of cash collateral.

Obinna Dike of Citi - Securities Lending Explained

Obinna Dike of Citi is one of many professionals who is actively interested in securities lending, which has quietly taken a status akin to hedge funds in the financial industry. Like any element of the financial system, securities lending poses both risks and benefits. Interested professionals such as Citi’s Obinna Dike know this. Through an in-depth understanding of securities lending, these professionals are able to safely navigate the business to bolster their portfolios, and those of their clients, when applicable.

What is Securities Lending?

Securities lending takes place when an investor lends his or her stocks, bonds or other financial interests (securities) to others in the financial market. The largest lenders are typically mutual funds, pension funds and ETFs, or exchange-traded funds. The largest borrowers are typically hedge funds.

Hedge funds and other borrowers use their on-loan securities to their advantage by making short sales. Short selling is the act of selling a security on the assumption that it can later be purchased back for less, resulting in profit.

Collateral

Borrowers are required to pay collateral that is an equal value to the loaned securities. Collateral is balanced with the market each day so that the lender can ensure the on-loan securities are adequately covered by the borrower. If the borrower provides cash collateral, it is typically invested so that it can earn interest; any interest on collateral is split in an agreed-upon manner by lenders and borrowers.

When financially-interested professionals, like Obinna Dike Citi, deal with elements in the financial system, they know that they are taking a risk. The key is to intelligently monitor the market so that risks taken are informed, with high chances of benefitting all parties.

Obinna Dike of Citi - Primary Big Data Technologies

Obinna Dike, a software engineer with Citi, is one of many in his field that understands and applies big data analytics. Companies like Citi turn to engineers like Obinna Dike to integrate big data analytics into their business practices because it aids them in understanding and using the data in their systems. Like other technologies, big data analytics can be broken down into several subcategories. Some of the primary subcategories include:

• Data Mining — Data mining allows businesses to inspect large volumes of data and to find patterns that appear within it. This information can then facilitate a more in-depth analysis of data, allowing companies to find answers to difficult questions. In short, data mining software sifts through the unnecessary in data to find what is useful for decision-making.
• Data Management — Before data can be analyzed effectively, it needs to be managed and organized. Most, if not all, large organizations have a steady stream of data flowing both in and out. Data management technologies essentially organize all of this data into a master program that helps keep all stakeholders on the same page.
• Hadoop —  Hadoop is a popular open-source framework that is able to store large quantities of data and to run applications on hardware clusters. It has become a primary big data technology as a result of its speedy processing of information, and because of its open-source status. To summarize, Hadoop is a free, reliable technology that processes and stores data.

Software engineers like Citi’s Obinna Dike Citi are often versed in one or more technologies associated with big data analytics, allowing them to better apply it for their employers or companies.

Obinna Dike, Citi Professional - Benefits of N-Tier/3-Tier Software Architectural Styles

Obinna Dike Citi employee since 2011, is a software engineer with over a decade of experience across three countries. Professionals like Obinna Dike are vital to the functionality of companies like Citi because of their specialized knowledge in the design, development, testing and architectural structuring of applications.

Among the many architectural software styles implemented by software engineers are the N-Tier and 3-Tier styles. These deployment styles divide functionality into segments, similar to what is known as a layered style, but they differ in that each segment is a tier than can be stored in a different physical location. Some of the primary benefits of designing an application with the N-Tier/3-Tier style include…

Maintainability – Each tier of an application is independent from other tiers, which means that updates and other maintenance changes can be implemented without affecting the entirety of the system.

Scalability – Scaling out a tier-based application is relatively simple, as tiers are based on the deployment of layers.

Flexibility – The flexibility of a tier-based application is one of the primary benefits. Because the tiers are independent, they can be managed and scaled separately without negatively impacting the application.

Availability – Tier-based applications have increased availability when compared to similar applications with different architectural structures. This is because applications can use the architecture of enabling systems through scalable components.

When engineers like Citi’s Obinna Dike assesses an application in the early phases, they will often make architectural style recommendations based on benefits like those above and on how they might relate to the application or business model in question.