Julie Lerner, CEO
Physical commodities exhibit a high degree of fragmentation and a lack of transparency when it comes to pricing and negotiating deals. There is a lack of benchmark pricing assessment for many commodities, since price reporting agencies do not cover all the different categories thoroughly and accurately. Consequently, the subjective pricing values for such commodities are vulnerable to manipulation. Further, certain products like frac sand are difficult to trade online due to the large number of variables with regard to quality, location, transport, and delivery window as opposed to natural gas, which has few negotiable fields that need to be addressed before commencing a deal. A veteran trader and entrepreneur, Julie Lerner realized this discrepancy and founded PanXchange in 2011 to develop a web-based trading platform designed to provide a market structure solution that is scalable across all commodity markets. “We are aggregating commodities into industry silos, all on a single platform for instant market access, price discovery, and negotiation of complex orders,” states Lerner.
PanXchange’s patented, software-as-a-service platform revolutionizes the way commodity traders locate and execute trades. The platform allows traders to enter orders into an active marketplace that is constantly searching for matches, and manage commodity trading online through any smart device. Traditionally, it takes a team of traders hours to contact multiple brokers and other traders via texts, phone calls, and emails to complete a deal. PanXchange’s platform reduces this time-consuming process to seconds, helping traders focus on increasing profits through greater optionality. “We offer the ability to negotiate every aspect of a physical trade deal while also managing credit risk and counterparty risk,” explains Lerner.
PanXchange’s platform is focused on the idea that strong underlying markets lead to robust derivative markets
At the core of PanXchange’s order matching technology is the ability for traders to bid on or offer multiple options for variables such as quality and shipment window, among others, to best match their books. PanXchange provides traders access to real-time market information including pricing, volume, and geographical trends for a particular commodity across the entirety of the market in real time. The amount of market intelligence generated by PanXchange, and the speed at which it is delivered, ensures that traders gain a competitive edge.
Lerner states, “PanXchange is built to be intuitive for all traders, while maintaining the highest level of security and data integrity.” The platform provides exclusive real-time and historical prices based on trades, live bids and offers, recorded transactions, and assessed market values. From these prices, PanXchange is able to build benchmark pricing assessment values for commodities globally. The platform’s customization for frac sand was launched in Q4 2017, and within two months, PanXchange was able to establish the industry’s first benchmark price for frac sand, enabling traders to better forecast pricing trends and assess spot and forward values. Similarly, PanXchange’s customization for the East African agricultural commodities market has been live for three years in Tanzania, Uganda, and Kenya, with over 30 different products listed on the platform and available for trade. The platform’s functionality resonates with traders globally; whether an oil trader in Houston or a small corn trader in Kenya, a user can easily take advantage of the platform.
Moving forward, PanXchange is expanding globally, exploring new opportunities in Asia and the Middle East, and is excited to address new markets and create benchmark pricing. “PanXchange’s platform is focused on the idea that strong underlying markets lead to robust derivative markets,” concludes Lerner.