[ T H O U G H T
with our clients. We first addressed
the challenges around spotting
with an automated process
of aggregation and netting of
Treasury spots applied across a
firm’s corporate bond transactions
and relationships.
More recently, Tradeweb
introduced Multi-Dealer Net
Spotting. This allows clients to
take baskets of Investment Grade
trades, both voice and electronic,
across a wide range of providers
and execute the risk electronically
and then price and STP all of
those trades at once. Before the
introduction of this patent-pending
system, the positions would most
likely have been aggregated over
a period of time against multiple
dealers with different legs being
spotted at different times with
different Treasury prices. With
Tradeweb Net Spotting, all the
spots occur at a single moment
across multiple dealers.
How can firms benefit from Net
Spotting?
It’s the equivalent of compressing
multiple conversations into just
a few clicks, delivering scalable
savings in execution costs for all
participants that have never before
been captured. By fully integrating
Tradeweb’s robust US Treasury
composite of 20+ contributing
dealers into the net spotting tool,
buy-side traders no longer need
to wait for a Treasury quote. This
reduces the chance of slippage and
frees up time to focus on value-add
L E A D E R S H I P
|
T R A D E W E B ]
“Tradeweb is the first electronic platform
to fully integrate the corporate bond and
US Treasury markets in one place for
seamless spotting and hedging.”
and portfolio construction. Plus,
instead of pricing these bonds
separately and receiving two
Treasury spot prices – one at the
bid side and one at the offer side
- both trades would be spotted at
one price instead of having to pay
the bid/ask on the Treasury bond.
Net Spotting has already proved
popular among Tradeweb clients.
More than $147 billion has been
spotted already this year and firm
participation is up 70% since 2018.
Not only is Net Spotting saving
clients real money, which directly
improves their investors’ returns,
but the streamlined workflow
enables simpler production of pro
forma audit trails and reduced
chance of transaction failure.
Furthermore, firms can optimise
the frequency of their spot-
hedging activities over time based
on the number and characteristics
of their trades and their portfolio
requirements.
How can traders leverage Net
Spotting in conjunction with
execution protocols?
Net Spotting works across all of
Tradeweb’s execution protocols
including: electronic RFQ, All-
to-All, voice processed trades,
automated trading, click-to-trade
“It’s the equivalent of compressing
multiple conversations into just a few
clicks, delivering scalable savings in
execution costs for all participants that
have never before been captured.”
and portfolio trading. This gives
traders complete flexibility in their
trading strategy while still offering
them the post trade efficiencies
and cost savings of Net Spotting.
Traders looking to execute large
lists or portfolio trades, which can
number hundreds of individual
line items, are particularly good
candidates for Net Spotting. With
a traditional hedging workflow,
traders had to price these spread-
based bonds separately and
receive two Treasury spot prices.
Tradeweb Net Spotting saves them
from paying the bid/ask on the
Treasury bond for hundreds of line
items, which quickly adds up to a
lot of savings.
How do you see innovation helping
the credit markets evolve?
As the credit markets become
further digitised, there’s more
opportunity for convergence
across markets and client sectors.
Tradeweb is the first electronic
platform to fully integrate the
corporate bond and US Treasury
markets in one place for seamless
spotting and hedging. But it
won’t stop there… our live
streaming liquidity was made
possible through an integration
with Tradeweb Direct, giving
Institutional credit traders access
to middle market and non-
traditional liquidity providers and
vice versa.
With over 40 products on our
platform, Tradeweb is in a unique
position to connect traditionally
siloed markets, uncover new ways
to innovate and provide efficiency
through technology to clients.
Issue 62 // TheTradeNews.com // 49