Open for buy-side business
MarketAxess’s All-to-All Open Trading marketplace
Kurpis, fixed income trader at Alliance-
Bernstein. “That being said, full buy-side
to buy-side trading is a long way away and
the street remains an important conduit
for trading bonds.”
Indeed, though a vast majority of Open
Trading participants come from the buy-
side, buy-side to buy-side deals only make
up one-third of overall volume on the
venue. Coltman says that the reality is that
it is difficult to have a fixed income trad-
ing platform that excludes dealers from
it. Being able to trade cheaply with other
buy-siders is all well and good but finding
someone to take the other side of a trade
is not easy—particularly in conditions
where everybody is chasing the same bias.
The need for an “all-to-all” utility where
everyone can meet everyone is likely to re-
main standard for the foreseeable future.
Growing pains
“I think all-to-all will be in general more
useful than buy-side to buy-side for sure,”
says Kevin McPartland, head of market
structure and technology research at
Greenwich Associates. “In fixed income,
keeping the sell-side out severely limits
the likelihood of a match, especially in
these markets where everyone seems to be
going the same way.”
Getting the initial traction is perhaps the
hardest part for any new venue entering
the space. Liquidnet—one of the major
global equity electronic platforms out
there—expanded its offering into fixed
income in 2015. The idea was driven by its
success in equities.
“Our members told us four years ago
that our equity model was highly trans-
connects fixed income buyers and sellers, and
has seen a large uptick in activity.
$100
million
in cost savings to users in 2016
655
users by October last year
375
users in 2015
80%
of users are from the buy-side
Issue 51
TheTradeNews.com
47