In fixed-income markets, liquidity is typically dispersed rather than all in one place. Tradeweb aims to piece the market together to provide its customers with the most complete liquidity mosaic.
“There’s really no other firm that can say they cover the retail space, the institutional space, and the dealer-to-dealer space, which are the three communities across the fixed income markets globally,” said Lee Olesky, Tradeweb’s chief executive officer.
Tradeweb had a busy 2014. In March, the company partnered with asset-management giant BlackRock to create electronic trading solutions in the rates and derivatives markets. In October, Tradeweb announced the launch of a new U.S. corporate bond trading platform for institutional investors. And in the still-nascent swap execution facility business, its market share in interest rate swaps about doubled to more than 30%. “It has been a very successful launch for us into the SEF world,” Olesky told Markets Media.
Tradeweb operates two SEFs, the fully disclosed TW SEF and the anonymous CLOB (Central Limit Order Book) DW SEF. The firm’s SEFs enable plain-vanilla swap trading, as well as variations such as market agreed coupon (MAC) swaps and package trades.
“We led the market with some innovation,” Olesky said. “We traded over $700 billion in compression, which is a functionality we added midway through the year. When you look at the offerings of both Tradeweb and Dealerweb), we have a very significant foothold.” Dealerweb is Tradeweb’s interdealer-broker market offering.
“More importantly, we’re unique,” Olesky continued. “We’re the only firm that really has a considerable amount of liquidity in our order books, and also in our RFQ (Request For Quote) business, which is mostly dealer-to-customer business. We even have voice brokering. We span different functionalities and different types of protocols.”
The new corporate bond trading platform is meant to complement Tradeweb’s established presence in interest rates, treasuries and mortgages. “We have also been growing all our money market instruments,” Olesky said. “In Europe, innovation has allowed us to trade quite a bit of the ETF market, and we have a number of new functionalities in European credit that allow us to have session-based trading.”
Olesky said Tradeweb is investing in technology as much as ever, in areas ranging from the GUI (Graphical User Interface) on the screen through back-end matching engines. “The look, feel and speed with which people get matched is going to continue to be enhanced,” he said.
“Collectively for the Tradeweb business, it has been another year of significant innovation and growth, both financial growth and product growth,” Olesky said. “Our retail business, Tradeweb Direct, is the largest U.S. platform for retail activity in fixed income.”
Tradeweb clients are located in 55 countries, and more than $500 trillion of fixed-income and derivative trades have executed on the company’s facilities over the past decade.
In 2015, “we’re going to continue to push into new markets, new geographies, and new asset classes,” Olesky said. “That’s really been the story of Tradeweb over the past 15 years as we’ve brought greater transparency and efficiency to markets.”