Mostly… fixed income and cross product eTrading

February 27, 2008

OTC and Exchange-traded derivatives ..super

Filed under: etrading — holky @ 9:15 am

Finextra tells us Nyse Euronext partners with SuperDerivatives – to join the dots to offer direct access to the Liffe Connect electronic trading platform … speeding convergence between OTC and exchange-traded derivatives markets – with one target being to tighten the bid/offer spreads in the corresponding exchange products.

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February 19, 2008

LinkedIn, Bloomberg, and your data

Filed under: Nuts and Bolts — holky @ 9:09 am

Data data data data data.

LinkedIn announcement are going to provide a new relationship mining tool through their network, therefore selling your relationship info as stored LinkedIn … the company is apparently going to be tapping into the “social graph” of its users, analyzing relationships between people, their companies and professions to figure out who knows a lot about what.

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Is Bloomberg heading in the same direction?  I see they are now recording the number of hits each persons profile has… an indication of how ‘popular’ or ‘newsworthy’ someone is. Would that and the relationships as defined in that persons address book be worth $$$$$ to journo’s or headhunters?

February 18, 2008

A Single Platform

Filed under: 2015, etrading, Nuts and Bolts, OMS / EMS — holky @ 11:40 am

SIFMA Fixed Income eTrading Survey 2008 results show 85% of buy-side respondents expect to be using a single platform for all of their institution’s wholesale electronic trading activity within the next two years.

At SIFMA we heard that the future is not all multidealer venues. Indeed, singledealer platforms are still a serious consideration for the majority of attendees where there is a functional benefit.  We also heard that buyside do actively want competition in the ECN/vendor space – if only so the functional landscape does not stagnate.

So answering the question posed in Tales from a trading desk, buyside expectation and indeed their desire would appear that the single platform in question is not one of the vendor or dealer platforms, instead it is their own desktop (ie their single platform), and that this platform is able to aggregate their view of liquidity into a single view of the market, from where they trade. So OMS or EMS depending how you measure it.

My panel ( this one of the only snippets I heard 😦 ) concluded that 2008 is back to basics and so time for the foundational work to be done so we are ready to benefit from the new venues and landscape changes that the dealer consortia are driving.   In an environment where fixed income etrading budgets are broadly the same as last year (*), we need to be specific about where the right place to spend is. So in terms of back to basics, spend your 2008 money on the implementation of your OMS and then […through 2009] plugging it into the liquidity pools.  

Which pools do you connect to though? Well, once buyside have got the hang of plugging their OMS into fixed income liquidity pools, we’d be mad not to expect a much stronger drive from buyside and sellside to hook up direct in order to handle bespoke orderflow/information flow, or perhaps a move towards something more cross-product.  Sure, this is a relationship enhancer so perhaps only really relevant for top tier clients, but how long will critical mass of connections into say one of the fi venues want electronic order flow constrained in some way just to match what is possible via the venue’s GUI ?  Will those venues constrain the types or order that they can process, or will they move towards a more generic orderflow routing instead?  … though perhaps that’s a question for 2010 and beyond.

(*) assuming survey of SIFMA attendees is indicative of the market as a whole. The other options were that budget was materially less or materially more than 2007.

February 10, 2008

Banking crisis averted? Virtually.

Filed under: Nuts and Bolts — holky @ 8:18 pm

With this news that it is now prohibited to offer interest or any direct return on an investment (whether in L$ or other currency) from any object, such as an ATM, located in Second Life, without proof of an applicable government registration statement or financial institution charter as per my original musing about Second Life, it seems that virtual regulation is absolutely on the cards… albeit not per-transaction rules at this point, although I wonder how long it will be until a regulator of the real-markets gets involved?

February 9, 2008

Bloomberg fixed income etrading

Filed under: etrading, Nuts and Bolts — holky @ 5:38 pm

So, what is the impact to the future of Bloomberg fixed income etrading now Russel Levi has moved to Superderivatives ?

February 7, 2008

Reuters RTFI gets IRS

Filed under: etrading, Nuts and Bolts — holky @ 1:16 pm

I was pondering what was going on with Reuters RTFI, in the light of Thomson/Reuters, and also Liquidity Hub, when I got an out of the blue notification saying they’d just introduced ‘click to trade’ capability (so not RFS?) on IRS via RTFI (with Deutsche Bank)  … though none of this appears to be mentioned on the RTFI information page at time of posting.

February 5, 2008

Everyone’s moving to equity anyway!

Filed under: 2015, etrading — holky @ 8:40 pm

EFN tells us  3 senior traders from Citigroup have left to set up a cash equities division at  London-based fixed income heavyweight Icap … in the latest evidence that specialists in other areas are moving into the equities business.

Next Generation Pricing Systems

Filed under: Algos, etrading, Nuts and Bolts — holky @ 3:40 pm

I have commented in previous posts that the next generation of pricing systems will be one of the foundations for innovation in the etrading space, so heres a quick checkpoint; if your bond pricing system is still largely restricted to instrument on Y axis and its attributes in tabular form on X, then check out the demos at lab49 to start worrying about how soon you’re going to have to start again from scratch.    🙂

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Actionable IoIs

Filed under: etrading, Nuts and Bolts — holky @ 2:31 pm

So following on from one thread in the tradeweb discussion, actionable IoIs are the subject of this traders magazine article

There seem many hurdles to getting this going in the equity space – so is getting this going for fixed income through the previously equity autex pipes (yes i know fixed income autex isnt new but who uses it? seriously) er where was i, yes..  is doing this for fixed income under the Tradeweb brand seen as “lower hanging fruit” as we already know and love the concept of autoexable axes?  .. so the hurdle is introducing the autex technology to the fixed income guys in order to join the autex dots…?

Indeed, I wonder if there is actually widespread ‘demand’ on buyside or (yes spot the irony) it is just an indication of interest coming from buyside?  It’s so easy to say yes that sounds great please let me know more … and this comment cast a different light, Some customers that execute electronically want actionable IOIs,” says BNY ConvergEx’s Cangemi. “But for long-only asset managers looking to buy into or sell a significant piece of liquidity, a follow-up conversation to an IOI is almost mandatory for a prudent execution decision.” One size doesn’t fit all.

Some stats in the article say AutEx sends out about 1 million IOI messages every day, 15 to 20 percent of which are naturals (ave size 75000 shares ..didnt mention ave consideration), according to Tradeweb’s Albert Lojko.  Article also places BlockDATA (owned by Tradeweb, being AutEx’s industry-standard counterpart used by buysiders to try to discern who has the axe in a name) at the receiving end of the flow; which should mean there is sufficient drive to at least reach some form of actionable IOIs in the foreseeable future.

February 3, 2008

Back office woes continue

Filed under: etrading, Nuts and Bolts — holky @ 8:07 pm

Hedge funds and mutual funds will continue to have difficulty staffing their back offices in 2008. WSJ article includes a comment that “fund companies have to assume now that their workforce is highly mobile and they won’t stay long in a particular position”

It’s always been a fairly natural move from back office into etrading, but I wonder if the experiences and rumours associated with Jerome Kerviel and SocGen will going forwards cause any pause for thought in taking a back office joe into an etrading position with finger-on-the-trigger in front office?

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