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and flows in fixed income has also enabled a more consistent approach to pricing on the buy-side . All of these contributing factors have led the buy-side to become more proactive as opposed to reactive when it comes to finding executable pricing and minimising opportunity costs , driving them into the arms of alternative liquidity options while the sellside are unable to swing the bat in size . Increasingly , the buy-side are becoming price makers as opposed to price takers . However , the key hinge to cementing this trend as mainstream is data access .
“ There ’ s been an increase in the willingness and ability to leave latent liquidity in the marketplace to try to get things done in a slightly different way ,” explains head of trading at Jupiter Asset Management , Mike Poole . “ I don ' t yet see an increase in confidence around the price at which larger size will clear . There ' s still some reticence on the buyside to leave larger orders to trade at a certain price because of the lack of transparency that persists but for smaller sized absolutely .”
Tools available In light of this , venues and vendors have been quick to respond by innovating to accommodate this new buy-side demand for control over liquidity and pricing . As willingness to leave latent liquidity in smaller size in the marketplace has grown on the buy-side , anonymous platforms such as Liquidnet ’ s dark pool and UBS ’ credit trading solution , UBS Bond Port , have come more to the fore .
Anonymous all-toall platforms provided by MarketAxess ,
Tradeweb and Bloomberg - which allow both buy- and sell-side firms signed up to the platform to trade with one another , including buy-side to buy-side - have also grown in popularity in recent years . This has been exacerbated by canvassing from venues and the ongoing offboarding trend seen across the industry , as participants try to reduce costs by trimming down the number of
counterparties they use . One of their chief selling points is that they allow buy-side to buy-side ‘ market making ’, reducing costs as the liquidity provider doesn ’ t need to capture the spread as in traditional methods of trading because the platform acts as an intermediary to absorb risk . They also come bundled up with tools offered by venues such as artificial intelligence-based predictive composite pricing which combines consolidated data sources with valuable trading data harvested on their platforms to offer users a more accurate reflection of where instruments are pricing .
All-to-all platforms , however , allow for some degree of
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