Bond Sellers More and more Automate Buying and selling | Bonds & Fastened Revenue
The company bond market is present process a seismic shift, with almost 30% of bond supplier trading quantity now executed with out human intervention, marking a vital milestone within the electronification of fixed income trading..
“The fixed-income market is moving into the next phase of electronic trading in which trade execution is not simply electronic, but fully automated” mentioned Kevin McPartland, Head of Analysis at Coalition Greenwich Market Construction & Know-how and creator of Company Bond Sellers Concentrate on Commerce Automation.
Constantly growing market volumes, shrinking supplier revenue margins and shopper expectations for fast liquidity are all driving supplier investments in automation.
Coalition Greenwich analysis discovered that top-tier U.S. company bond desks see roughly 30,000 inquiries per day on average, making it’s now nearly unattainable for people to manually reply to all (or in some instances, even some) of these client-generated requests-for-quote (RFQs).
The most important sellers and non-bank liquidity suppliers are leaders in automation adoption, with top-tier companies in our analysis executing 57% of their trading quantity with out human intervention and non-bank liquidity suppliers 70%.
Sellers Title Automation as Prime Tech Precedence
Automated execution is poised for even more dramatic growth forward.
“Interest in fully automated trading is not limited to the biggest corporate bond liquidity providers,” mentioned McPartland. “Nearly two-thirds of corporate bond dealers see increasing automation in the trading process as a top technology priority for 2024.”
The report breaks down the prevalence and use of automated trading by bond kind, order measurement and trading venue, supplies a detailed breakdown of how automated execution works, and appears at future alternatives for extra automation.
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