MarketAxess has successfully launched an enhanced Mid-X protocol this past year, expanding its anonymous mid-point matching session, rolling it out for emerging markets and Eurobonds, and, more recently, for US Credit. As it is fast becoming a preferred market protocol with dealers, Steve Tait, Head of US Dealer Execution Business at MarketAxess explains what’s behind its growing success and what’s on the horizon for Mid-X and MarketAxess dealer solutions.

Mid-X offers a unique protocol for dealer-to-dealer matching. How does it work?

Mid-X streamlines interdealer matching with a one-step process that’s faster and more efficient than traditional approaches.

The predominant protocol has been a two-step process: dealers first load their interest and wait for the system to indicate offsetting interest, then return to the platform where a mid-price is set and they decide whether to attempt to match.

Mid-X eliminates that back and forth waiting period. Users enter the platform, immediately see a mid-price, decide whether to submit to match and MarketAxess matches at the end of the Submit window. A dealer could complete the entire process in under a minute if needed.

One of the other benefits of Mid-X is an extremely reliable mid-level price. Mid-X is powered by CP+™, our award-winning, predictive pricing engine. Our CP+ mid-price is derived from real tradable levels, including US TRACE, TRAX, and RFQ inventory data — calibrated independently and objectively. It’s not just your average indicative mid-price, but one of the most accurate and reliable mid-pricing tools available in the market.

Beyond speed and pricing, what other advantages does Mid-X offer?

In addition to providing a true, best mid-price, our one-step process using CP+ stops information leakage, by preventing participants from loading interest and then pulling it when they see offsetting interest.

So, participants can join daily, anonymous, mid-point matching sessions using unbiased CP+ pricing levels. Our no-name give-up protocol reveals only the matched size, so dealers can confidently tap into a vast pool of liquidity without information leakage concerns. Dealers who do not commit firm risk do not get any color.

Finally, Mid-X also minimizes risk – we’ve built in advanced risk controls that limit exposure to ensure users are not left with skewed risk positions post-session. Dealers can confidently submit large numbers of orders across multiple sectors and maturity buckets.

Since relaunching Mid-X in the US, you’ve had a record month in September and a record quarter in Q3. Tell us more about the roll out and global adoption of the platform.

Adoption has been strong and steady. We’re now live in the US, Europe, APAC, and CEEMEA. Outside of the US, we’ve doubled volumes YoY from 2024, and in the US, we have exceeded 2bn printed. This year, we’ve launched Asia, CEEMEA and Swiss Mid-X sessions, and are running up to 6 times a day, with over 60 unique dealer firms having accessed the protocol.

Dealers were looking for a different approach for mid-point matching — one that delivers shorter, faster sessions with precision pricing, no information leakage and reduced risk. Mid-X provides dealers with easier access to liquidity, increased workflow efficiency and a better tool to recycle risk.

What’s next for Mid-X?

We’re focused on two priorities: product enhancements and global expansion.

On the technology side, we’re integrating Pragma technology as the backbone of our entire system and the foundation for the MarketAxess platform. This will enhance trading efficiency and deliver better execution quality. We are also upgrading the Mid-X user interface to X-Pro, for enhanced workflows and customizable features. We will add API connectivity which will allow algos and tech-savvy dealers to interact with our sessions. LATAM would be a natural next region of expansion given we already have local presence via our LiveMarkets and LiveMarkets Match.

How does MarketAxess support dealers using Mid-X?

Mid-X is backed by our DealerAxess team, a dedicated ‘white-glove’ service to line traders to bring more liquidity to the platform and facilitate trading. It’s a global team of market specialists with decades of combined experience in trading, sales, broking, on-desk operations and settlements. They provide comprehensive, high-touch support throughout the trading journey, from pre- to post-trade. The team gives dealers real-time feedback at the point of trade, keeping them connected throughout the trade process. As a result, dealers can confidently partner with the DealerAxess team to leverage a significantly larger network that spans multiple regions and jurisdictions, scaling their business to levels previously out of reach.

You spent more than 25 years at JPMorgan, in several senior roles in global credit trading and electronic trading, most recently as executive director of global credit trading, overseeing systematic market making and algorithmic trading. Now at MarketAxess, you’re developing liquidity solutions for dealers in credit markets. What has been the biggest change you’ve seen in your career, and where do you see the market heading?

The biggest change I’ve seen in my career has taken place in just the last five years, during which time we have seen an explosion of algorithmic trading, and desks thinking about risk holistically. Dealers are implementing a more centralized approach to risk across trading desks and a more algorithmic, e-friendly approach to making markets.

Pre-trade data quality and transparency is certainly increasing on both buy and sell side desks. The ability and willingness to stream and participate in electronic protocols is growing. Many of the major broker dealers now have algos which price suggest, trade autonomously and manage their own risk. Session trading is benefiting from these developments and is becoming increasingly automated and low touch.

As we move towards greater automation and more dealer participation, there could potentially be a world with continuous mid-point matching.

What’s next for you at MarketAxess?

I’m excited to be at MarketAxess leading the charge for our dealer solutions, focused on developing products that will help dealers connect to clients, manage their risk and generate profits in the credit markets. Mid-X is one part of that puzzle, but there’s more to come. We have another new product launching called Targeted Axes that I’m really enthused about. It’s another dealer-friendly solution that will help dealers trade more efficiently with their clients, with even more functionality. It will allow dealers to engage their clients with their firm, block axes and manage the disclosed trade through to booking.

MarketAxess CEO Chris Concannon has articulated a strategic focus on the dealer-initiated channel. How does Mid-X fit within that vision, and how is MarketAxess positioned to drive continued innovation and success for dealers?

Mid-X is one in a portfolio of tools focused on enhancing dealer value. Within our dealer solutions ecosystem, dealers have continuous access to liquidity throughout the day in multiple ways; dealer-to-dealer via Mid-X, via Open Trading with Dealer RFQ, Live Markets or Match and, soon, disclosed with their clients through Targeted Axes.

With our strong history in Open Trading, the broadest range of liquidity options, our leadership position in the market, and our unmatched network, we’re uniquely positioned to lead the market into the future of electronification.