While it’s general knowledge that electronic trading continues a relentless march on fixed income, the stats are always worth an update.
The figures discussed on a recent NY Fed event panel illustrate what’s going on: daily treasury volumes are averaging $600 billion, peaking at almost $1 trillion in February 2018; about half of trading is via interdealer broker (IDB); 70% of that is electronic or automated; proprietary trading firms (PTFs) account for 62% of electronically traded volume, and 10 firms account for 90% of PTF trading.
So how is the liquidity provision competition shaping out? Panellists discussed how electronic trading has changed things for business models and what’s going to, or should, happen next.
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