New Price Discovery And Automation Tools Increasingly Essential For Trading Corporate Bonds - New Burton-Taylor Report
- Anonymous all-to-all trading has reshaped traditional liquidity provisioning.
- Competition among pricing data providers has grown dramatically in recent years.
- Unique execution protocols serve as a new means of price discovery outside of traditional workflows.
LONDON and NEW YORK, June 8, 2021 /PRNewswire/ -- While dealers continue to be the principal source of executable pricing data (and therefore trading market share), the steady adoption of both electronic execution as well as electronic optimization of traditional workflows have forced a retooling of their pricing strategies, according to two new research reports published today by Burton-Taylor International Consulting, part of TP ICAP's Data & Analytics division, Parameta Solutions.
Key findings include:
- Given the balance sheet constraints and cost of capital put into effect following the financial crisis, large dealers, once the principal means of liquidity provisioning in U.S. Credit, have stepped back from their role of providing principal liquidity via inventory.
- The establishment of high-frequency, alternative liquidity providers as well as innovative electronic trading venues have stepped in to bridge this liquidity gap- dealers nonetheless drive 80% of volume.
- MarketAxess continues to capture roughly 80%+ of electronically traded US credit for both Investment Grade and High Yield markets.
- Tradeweb's platform is the second most successful in terms of market share and has maintained growth in total TRACE market share over the past several years.
"Electronic credit trading platforms continue to leverage internal trading data and technology to create new pricing, execution, and workflow solutions to take advantage of US credit market efficiency gaps," said Colby Jenkins, analyst at Burton-Taylor. "A willingness to accept liquidity anonymously from all sources at an optimal price over attributed dealer-focused relationship trading indicates the growing importance of execution quality for the buy side," he added.
Burton-Taylor today announced the publication of two reports covering the Fixed Income data and services industry. The U.S. Corporate Bond Electronification & Market Data Introduction report analyzes the changing structure of the corporate bond market to one that relies more heavily on electronic trading. The US Corporate Bond Electronification: How it's Altering the Pricing Mechanisms report analyzes key electronic execution systems and platform providers with a focus on their differentiation and the pricing capabilities of each.
The reports are available for immediate download by Burton-Taylor research members through the research portal. Detailed information on the reports can be found here or the report can be purchased by contacting [email protected], or telephone +1 646 225-6696.
About Burton-Taylor International Consulting (www.burton-taylor.com)
Burton-Taylor International Consulting, part of TP ICAP Group's data & analytics division, Parameta Solutions, is the recognized leader in information industry market research, strategy and business consulting. Burton-Taylor Exchange, Credit, Risk, Compliance, Media Intelligence, PR and Market Data share figures are seen as industry benchmark standard globally. For further information see www.burton-taylor.com.
About TP ICAP (www.tpicap.com)
TP ICAP brings together buyers and sellers in global financial, energy and commodities markets. It is the world's largest wholesale market intermediary, with a portfolio of businesses that provide broking services, data & analytics and market intelligence, trusted by clients around the world. We operate from offices in 31 countries, supporting award-winning brokers with market-leading technology. For further information see www.tpicap.com.
SOURCE Burton-Taylor International Consulting
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