FlexTrade Expects More Electronic Bond Trading

Terry Flanagan

FlexTrade Systems and its customers are experiencing the impact of rapid transformation in the fixed income markets brought on by regulations and market dynamics. With market participants expecting more electronic trading in bonds and interest rate derivatives, the technological challenges are mounting.

“Customers are feeling the aftereffects of Dodd-Frank,” said Jamie Benincasa, senior vice president of sales a Great Neck, N.Y.-based FlexTrade. “We are seeing a coalescing of all these regulations and market changes, and we expect to see this continue in 2014.”

The electronification of the fixed income marketplace is another trend that will continue in 2014.

“We have heard from our larger customers that they will only trade Treasuries electronically, and they need us to integrate price feeds from various liquidity providers,” Benincasa said. “We have done so and are currently trading these instruments at FlexTrade. However, corporate bonds are still considered the Wild West. There’s not a lot of transparency, not a lot of liquidity, and several different venues to trade on. Many firms, notably indexers, need to buy some of these very thinly-traded instruments and are looking for ways to access liquidity in a more straightforward manner.”

FlexTrade’s FlexTRADER EMS is certified to trade U.S. treasuries as a member of the BGC Partners Preferred Vendor Program. As such, it can connect directly to BGC’s proprietary trading platform to offer customers access to BGC’s electronically traded products including US Treasuries, sovereigns, and credit derivatives.

FlexTRADER, a multi-asset execution management system for trading individual securities or portfolios, provides out-of-the-box cross asset trading strategies which can be customized, global access to broker algorithms, as well as the ability to build proprietary algorithms.

The platform provides organically developed pre-trade, real-time and post-trade analytics (FlexTQM), predictive analytics (FlexEdge); risk and cost optimized portfolio trade scheduling (FlexPTS); advanced integrations with major OMSs; smart order routing; and Complex Event Processing (CEP).

“FlexTrade has a team of dedicated developers building out fixed income capabilities within our product suite,” said Benincasa. “They have delivered a roadmap, and are working toward providing advanced functionality in the fixed income space, including corporate bonds. We are continuously improving on our hosting capabilities to access low latency market data and to several hundred brokers via our Fix hub. We also provide access to several markets trading global equities, derivatives and FX. We are continuing to build upon our multiasset capabilities to facilitate the netting and the blocking of futures and FX instruments.”

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