Outlook 2021: Billy Hult, Tradeweb01.08.2021
Billy Hult is President of Tradeweb, a fixed income, derivatives and ETF electronic trading platform.
What were the key theme(s) for your business in 2020?
For us it was certainly the accelerated trend towards more electronic trading. This trend had been playing out for some time, but in 2020 it really reached a new level due to remote work, massive debt issuance and periods of intense market volatility. Remote work was in many ways the most important of these because it has changed behaviors — and that’s what speeds up the adoption of technology.
While heavy volumes in March mostly reflected market volatility, record volumes during Q4 reflected growth in all asset classes and the application of newer tools and protocols. On our credit platform for example, we experienced heightened volumes in March that continued well into Q4 as usage rose across institutional solutions like portfolio trading, all-to-all, net spotting and voice processing.
The accelerated adoption of electronification over the past year has presented a clear example of the changing needs of our clients. While clients are always looking for new and intelligent ways to trade more efficiently, this goal was met with more urgency as the world shifted to an all virtual environment. Clients became more willing and eager to adopt innovative technology solutions, a trend we expect will continue into 2021.
What was the highlight of 2020?
From a product perspective, increased use of portfolio trading within the credit market quickly became a highlight of 2020. While pandemic-era volatility factored into the rise of portfolio trading, even before the pandemic portfolio trading was booming. At the beginning of 2020, we logged more portfolio trading volume on our credit platform ($7.8B) than we had in the first five months of 2019 combined ($7.7B). That growth continued throughout the year, as Tradeweb’s quarterly notional volume more than doubled from $28.3 billion in Q1 to $57.6 billion in Q4.
What surprised you in 2020?
Actually this was not at all surprising, but one of the most incredible things I’ve seen over the past year following the early stages of the pandemic was the resilience demonstrated by our employees and clients. Our people have a history of outperforming under challenging circumstances, but this was the first time any of us faced a health crisis, an economic crisis, a market crisis, and various social and political crises all in one year.
What are your expectations for 2021?
As we enter 2021, we expect the trend towards more electronic trading to continue. Soaring adoption of electronification, while accelerated by the pandemic, has been an ongoing trend for the past couple of decades. This gives us confidence that the trend toward increased electronification use is not simply a blip, but rather an industry shift that will extend well beyond the COVID-19 crisis.
What trends are getting underway that people may not know about but will be important?
The shift toward anonymous all-to-all trading has been on the rise for quite some time, and is one of the main drivers behind the massive growth in trading volume we saw this past year in credit.
Anonymous all-to-all trading, which allows market participants to post orders anonymously to the entire market, therefore gaining the ability to trade across pools of liquidity, remained strong throughout the year and we expect to see this trend only grow in 2021 as clients continue to look for new ways to access liquidity.
Lime acquisition "had the feeling of getting the band back together."
Firms need flexible technology that enables seamless performance wherever their employees are.
Capital markets firms are emphasizing best-in-class technology for surveillance and risk management.
Financial communications trade group head expects a more flexible work environment to endure.
Fintech CEO cites a lack of clarity around best practices for streamlining inventory, funding and liquidity.