Mostly… fixed income and cross product eTrading

December 27, 2007

Tradeweb cash equity trading

Filed under: 2015, etrading — holky @ 11:40 am

Thomson TradeWeb, the dominant fixed-income electronic trading platform, plans to broaden its reach to cash equities in the second half of 2008. So says traders magazine.

A cash-equities trading platform is anticipated for the latter half of next year, with equity options after that. Toffey said TradeWeb could build an upstairs equities block trading platform. An electronic communications network is less likely, he added, although he didn’t rule it out.

“Bringing the equities business under the TradeWeb organization gives us focus and expertise to build out the transaction side,” Toffey said, referring to the trading of equities, compared with routing and the current AutEx indications product. “It’s ultimately about having liquidity. We’ll work with dealers and the buyside to help put the [fragmented] market back together.”

TradeWeb will also make AutEx, its indications-of-interest and trade-advertisements product, more electronic and executable. This overhauled product, as well as any other TradeWeb trading platforms, could use the firm’s FIX-based routing network. The network, which has 7,000 connections and handles more than 15 percent of U.S. volume in traded equities, will be renamed TradeWeb Order Routing Network.

December 21, 2007

NYSE bond trading platform

Filed under: etrading — holky @ 11:01 am

finextra lets us know that Nyse Euronext is working on the development of a bond trading platform that can handle fixed-interest securities from both the US and Europe, according to a report by French newspaper L’Agefi.  The report, which cites a source close to the project, says that the transatlantic exchange plans to launch the platform – which will manage both corporate and government bonds – by the end of the first quarter of 2008.

Will be interesting to watch how (/if) this is pitched to european investors.

MTS Brazil … order driven update … algos on Euro MTS

Filed under: etrading, Nuts and Bolts — holky @ 10:05 am

From Reutersno ‘meat’ but plenty of maybes..

MTS is looking to clinch a deal to trade government bonds in Brazil next year and is exploring possible accords in China as it seeks to expand abroad, the head of MTS told Reuters.

Pietroluongo said it was too early to talk about moving away from the current market-making trading system to introduce a cheaper and more liquid order-driven platform similar to what happens in some stock markets.  “We are still exploring the possibility to introduce an order-driven system on EuroMTS … but several banks are currently expressing doubts about it,” Pietroluongo said.  (previous post here).

MTS is also considering the possibility of introducing electronic algorithmic trading on its EuroMTS platform and consequently opening it up to intermediaries other than banks, like hedge funds, Pietroluongo added.

December 20, 2007

Sub-prime fuels etrading of MBS

Filed under: etrading — holky @ 4:27 pm

Electronic trading of US mortgage-backed securities is to grow faster than electronic trading in any other US fixed income product as investors look for greater price transparency in these complex instruments, increasing 35% by 2010 according to celent, compared to single digit % increases in other areas.   From EFN

MTS offers German bonds to hedgies

Filed under: 2015, etrading — holky @ 4:02 pm

MTS is setting up a new segment to offer German bonds to hedge funds in EuroMTS. As in EFN

December 12, 2007

2008 (part 1) – Bachman, Turner, Overdrive

Filed under: 2015, etrading — holky @ 4:25 pm

WSJ article on TowerGroup’s predictions for 2008….

– Global remaking of the capital markets, led by the battle for global exchanges

– All things electronic trading. If you’re not trading electronically, you’re dead.  (as a result, 2008 will be the year that the impact of latency really rears its head)

 – Derivatives.

– Global Risk Modelling.

– Portals. (bloody hell – where did we park that tardis?)

…and to get more European ingredients in there, stick MiFID into the pot with the first challenge/test of a major firms best-execution policy.

FIX Protocol Limited

Filed under: etrading, FIX — holky @ 4:21 pm

You could interpret the message from FPL about state of the nation (well, state of the globe really) re FIX as being great; FIX sorts out all of the etrading problems. FIX can cope with etrading in any asset classes anyone could ever dream of. FIX handles market data (whether requiring FAST or not). There are graphs to point at showing lots more people using it year on year. Everything’s rosy. If you are buyside and it’s not in your plans, now, then you’re clearly going to be at competetive disadvantage.

While I still think FIX is the eventual tech answer, I also think sellside have always taken all of the talking heads and blurb propoganda with a pinch of salt. And I’ll pose here the question now whether buyside do the same. (This question hasnt come from nowhere – rather crystalised by a conversation earlier today).

Sellside have invested in supporting FIX for (whatever product, type, class, ??) to satisfy  the marketing benefit or on occasion the flow with particular customer(s).  Over and above that sellside have invested in supporting FIX for the products that it is in use for (generally) exchange traded products, and in that space generally equity. Are they building a long term foundation in sticking this in for other product classes or venues – yes maybe so.  Are they believing the hype that everyone’s doing it right here right now … well, where’s that pinch of salt?

So on the buyside; start with the question of how many buyside clients are connected to sellside above FIX 4.2 … albeit with some agreed custom extensions that may or may not be 4.3+ or 5.0 compliant?    If the FPL talking heads are bigging-up FIX saying it handles all asset classes and types of flow and whatever, do buyside (quietly from a position of mild embarassment) discount this because they know they have fundamental tech problems to sort out first; problems regarding inhouse pricing and trading infrastructuure before they can even start to think about how this all interfaces with the outside world?  Problems where years of (relative) under-investment (in the big scheme of things) means the spend now needs to go there first; before the outside world connectivity comes into play.

Rather than focussing on what the latest version of FIX (feasibly) brings, wouldn’t FPL get more buyside uptake by delivering speeches and generic roadmaps that help go from a crap infrastructure position now to the wonderful world of full connectivity and everything that moves [via FIX].  If buyside can discount a presentation because they ‘feel’ they are behind the curve in terms of general oms/ems infrastructure, because the message is so just plug it in and alls well, and this stops them actively proceeding on as FIX implementation for their etrading; then that ~ 18 month lag for critical mass to connect via FIX is going to continue to roll at a constant 2 years…. because there is no-one “selling” a true solution – other than the OMS (EMS) guys (such as CRD) who pitch their solution as plug and play, and i dare say hit the problem of integrating with something (that is likely antiquated, fragile, and with a tonne of workarounds to automate the workflow).

One of the biggest problems doing this etrading thing at sellside was always that scaling the front end customers or number of trades they could stick through meant any operational workaround was highlighted – because it didnt scale without more people typing. So shouldnt FPL and the vendors hoping to carve a slice of pie be pitching themselves as sorting out the operational mess that the world is in, rather than claiming connectivity to new markets is their way forward at this point?  If its the case that you get the buyside genuinely on board and the world is your lobster, then why keep banging on about new markets and wonderful new stuff; when surely a ‘we can help you from where you genuinely are now into a better future’ is the way to go?

December 5, 2007

MarkIt and Liquidity Hub

Filed under: 2015, etrading — holky @ 2:27 pm

Finextra lets us know that Markit has agreed in principle to acquire SwapsWire, the dealer-backed electronic trade confirmation network for OTC derivatives processing.  So when will MarkIt officially join forces with Liquidity Hub?   … draw a venn diagram of the shareholders of each.   So LH handle the front end execution technology, MarkIt (swapswire) the STP, and MarkIt taking the market data stuff that they have always done pretty well anyway.   Sure, MarkIt have historically been on the credit side, so with just a nodding acquaintance with the rates swaps guys, but we’re in a different world now, right?

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