Economics of a Solver
A solver in IRIS is underwriting fixed-rate borrowing with floating-rate venues underneath. The job is not simply to quote the lowest rate. The job is to quote only the positions that can be funded, monitored, and defended for their full life.Where returns come from
- the spread between the borrower’s fixed rate and the venue’s realized funding cost,
- choosing the right venue to start on,
- moving exposure before funding conditions deteriorate further,
- earning recognized collateral-side surplus where it exists.
What capital is actually at risk
- debt-asset backing locked behind each live position,
- extra working capital needed for top-ups or orderly closes,
- inventory capacity consumed by longer or more volatile requests.
What breaks solver books
- mispricing duration,
- underestimating how fast venue funding can move,
- overcommitting backing across too many similar positions,
- leaving too little cushion above the minimum,
- assuming borrower close timing will always be convenient.
What good operating discipline looks like
- quote selectively rather than chasing every request,
- charge explicitly for tenor and concentration risk,
- keep room for backing top-ups and venue migration,
- separate realized economics from capital that is still committed,
- size positions around what the desk can actively manage, not only what it can theoretically fund.