News

Weekly Roundup - The Evolution of Corporate Bond Trading

Weekly Roundup - The Evolution of Corporate Bond Trading

Jim Greco's article, Corporate Bond Market Structure Evolution,
examines the evolution of corporate bond trading, particularly looking at dealers' constrained balance sheets and how this is impacting bond liquidity.

Against this backdrop, the market has gradually adopted e-trading.

Initially, electronic venues introduced alternative forms of liquidity, including MarketAxess developing a niche supporting odd-lots (this has since extended into larger sizes). And more recently, all-to-all trading has been launched by venues including MarketAxess and TradeWeb, with some success.

As ECN adoption has increased, electronic trading firms have emerged to become some of the top liquidity providers on the platforms. These firms have lower overheads than traditional dealers, which rely on humans to work inventories.

Jim summarises his article by saying -
"The corporate bond market has managed to so far avoid a potential crisis in liquidity brought upon by small dealer balance sheets, and it has done so in a unique way. In a decade the market structure has shifted from principal trading dominated by a couple dozen large banks into a burgeoning all-to-all market structure. Electronic platforms like MarketAxess, KCG BondPoint, TMC, and Tradeweb have displaced traditional voice trading. New liquidity providers, like Millennium Advisers, are able to compete with limited capital and salesforce. It is a time of rapid change in the marketplace and I am excited to see what the future holds."

To see the compete piece (its only a 7-minute read) https://medium.com/@jgreco/corporate-bond-market-s...


Share
Filter by section
Most popular stories
Mob Rules - Moving to Virtual Pair Programming

Mob Rules - Moving to Virtual Pair Programming

Like all companies, lockdown has impacted the way we work at TransFICC. We have always championed Extreme Programming as our methodology of choice, so when we decided to close the office at the start of March, this raised some issues around how we would operate with everyone working remotely.


Read More Twitter LinkedIn
All Change - Technology & Efficiency Are The (Old) New Buzzwords in Fixed Income

All Change - Technology & Efficiency Are The (Old) New Buzzwords in Fixed Income

Steve writes for The Financial Technologist - published by Harrington Starr


Read More Twitter LinkedIn
Press Release - TransFICC Secures New Investment From AlbionVC, ING Ventures and HSBC

Press Release - TransFICC Secures New Investment From AlbionVC, ING Ventures and HSBC

TransFICC has closed its Series A investment round for £5.75 million. Led by AlbionVC, it included new strategic investments from ING Ventures and HSBC. The new investors join existing shareholders, Citi, Illuminate Financial, Main Incubator (the R&D unit of Commerzbank Group) and The FinLab.


Read More Twitter LinkedIn
Twitter Feed