As electronic trading in fixed income continues to gradually gain traction, it’s a story of haves and have-nots among operators of trading platforms.
Have-nots include most start-up and emerging platforms, or at least those that have yet to find their niche amid a slower-than-desired migration to screen trading. Haves include the established players, a select group which counts Tradeweb as a charter member.
“Tradeweb is uniquely positioned as an electronic marketplace with scale and innovation in the institutional, interdealer and retail markets,” said Billy Hult, president of the 18-year-old firm. “Our deep integration with clients on the buy and sell sides continually informs our efforts to move markets forward, while allowing us to quickly deliver new technology and features.”
“The goal is to deliver sustainable innovation that continuously evolves fixed income trading, working with the right people to identify opportunities and develop meaningful technology that enhances the flow of liquidity,” Hult continued.
Tradeweb was the 2016 Markets Choice Award winner for Best Fixed Income Trading Platform. It was the New York-based firm’s third consecutive win in that category of the annual awards program.
For institutional fixed income traders, a win is when a purchase or sale is executed efficiently. Given the structural issues and persistent illiquidity of the markets, best execution is no mean feat, and as such end users can benefit by tapping into the right outside expertise.
“For nearly 20 years, Tradeweb has partnered with clients to deliver better access to fixed income liquidity by leveraging enhanced execution and workflow solutions to improve the entire lifecycle of trading,” Hult said. “Our focus on understanding and shaping the evolution of fixed income and derivatives trading with greater transparency, flexibility and efficiency continues to drive growth in electronic trading.”
Market observers note that the institutional buy side tends to move slowly when it comes to change, so incumbency is an advantage in an evolving market structure. But with dozens of newer competitors angling for their piece of the pie, Tradeweb needs to keep the needle moving in order to remain a market leader.
Hult said Tradeweb’s U.S. credit offering has gained significant traction, as more than $13 billion was executed last year, and there is more meaningful activity in round-lot trades of $2 million or more. The company is also receiving positive feedback about differentiating features like automated Treasury spotting functionality.
“In Europe, we launched trade data reporting and axes for ETFs, European government and corporate bonds, providing clients with real-time pre-trade information that enhanced buy-side price discovery,” Hult said. “In addition, we were awarded two contracts to provide the European Central Bank with our electronic trading platform, and also launched an ETP in Japan for trading interest rate swaps.”
“Meanwhile, we started electronic RFQ trading of U.S.-listed ETFs, which offers more immediacy for larger or less liquid ETF trades, plus more competitive price discovery and streamlined post-trade processing.”