Mostly… fixed income and cross product eTrading

October 9, 2007

Fusion and Liquidity Hub: Tradeweb 1, everyone else 0

Filed under: 2015, etrading — holky @ 7:44 am

Of course once Project Fusion announces a done deal and Liquidity Hub distribution drifts to Tradeweb as part of the Thomson/Reuters thing (though see torygraph), all roads appear to lead to Tradeweb – that’ll be the platform that all the dealers you care about are in, one way or another, so that’s the platform youll need on your desk.  Does that make a sizeable investment in Tradeweb, as part of the Thomson group that could accomplish many other things in the etrading space, an understandable medium term play? … especially when the other dealer concerns from 18 months ago are surely now addressed too; direct dealer fees and also issues regarding who owns the market data.

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8 Comments »

  1. It’s good to have an idea and then see the facts play out in something approaching the idea!

    Do you think I can ask Thomson for a cut???!!!! Just 1% finders fee would keep me ticking over…

    Comment by John Greenan — October 11, 2007 @ 12:08 pm

  2. How is DMA different from ECN and OTC trading?

    The dealers have injected another $150mm to create TradeWeb Fusion. Obviously the dealers don’t want their spreads to shrink/ disappear which the electronic markets do. Also as others pointed out, it is also about the market data and intelligence. Bloomberg & Reuters have made business out of packaging and redistribution of data from ECNs and Exchanges.

    Comment by Brian — October 11, 2007 @ 2:04 pm

  3. “Thomson Spin Off TradeWeb”???????

    Anyway, we can safely assume these 9 Banks will have their concerns (aka bills) addressed, but what of the others? In many respects the “others” can take it or leave it but there are a few like BarCap and Citi who are in an interesting position. Did they opt out of Fusion? Likely. Where they not included? Dunno.

    Comment by waratah — October 12, 2007 @ 3:03 pm

  4. This is an expensive non-event the FI will now more rapidly move toward DMA to IDB’s, exchange based FI trading, and more and more customers will simply meet customers paying a fee rather than paying the spread. LHUB will prove this before Fusion’s ink is dry.

    There is a generation of market participants that are just about to vacate both buy and sell side. The next generation simply scratches its head at the old boy’s. The next generation just wants to leave limit orders and are cool with paying brokerage rather than paying spread. The next generation just wants to hook up our black box and trade, to want to tap on the key rather than hear 20 minutes of “they are buying the long end…” hearsay on who is doing what in the market (which its actually useless information and who is “they” anyway?) This generation pays for its own golf and dinners. Here they come…

    Comment by lacidar — October 14, 2007 @ 1:06 am

  5. Lacidar wades in with size nines. Good post!

    Broadly I agree – the newer generation don’t really fit into the nice old categories of buy-side and sell-side. But at the moment the new generation must be sitting around feeling a lot of pain as they have a mish-mash of systems, people and processes to integrate. The benefits of Fusion is that it does provide the sell-side (as-is) with better control over distribution.

    Look at the current world where a buy-side OMS vendor charges sell-side brokers for the configuration to allow a buy-side to send orders to the sell-side. I think that part of fusion and other similar projects is to give the sell-side more control over the pipes that direct order flow.

    Comment by John Greenan — October 15, 2007 @ 3:08 pm

  6. Let me throw this in…..who has trained the “new generation” in the ways of the market?

    I’m not as certain that this change will occur as rapidly as lacidar thinks (although I hope it is quicker than current). But perhaps that means I’m part of the “old generation”….. :O

    Comment by waratah — October 18, 2007 @ 8:25 am

  7. A very good question. What I am seeing is that many bigger buy-sides are hiring dealers from sell sides who have more market savvy. Hedge funds are often ex-Investment bankers so they have the market knowledge and gradually the buy-side dealer role is being uprated.

    Comment by John Greenan — October 18, 2007 @ 10:38 am


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