Mostly… fixed income and cross product eTrading

June 24, 2008

Liquidnet for Fixed Income

Filed under: etrading — Tags: , , — John Greenan @ 11:57 am

Another one from John Greenan

While talking to a few senior folks in the buy-side about Fixed Income dealing they raised an interesting point. Why is there no such thing as Liquidnet for the corporate bond market?



  1. Hmm, interesting. Will meet them and see what they’ve got…

    Comment by John Greenan — August 21, 2008 @ 12:02 pm

  2. There have several attempts, none successful.

    Some of the reasons include:
    – it’s the dealer turf and they’ll defend it vigorously (clients risk being shut off by those same dealers)
    – there are ~600k CUSIPs in the inv grade credit markets, only ~3% trade in a given day; liquidity hump is too flat to benefit from an exchange (vs ~6k US equities w/~99% trading daily)

    We will have one in the next few years though…however, it will only be a slight incremental add to liquidity.

    Comment by Trader — August 28, 2008 @ 1:49 pm

  3. Follow-on question: is there a Liquidnet equivalent for government bonds?

    Comment by dechaz — September 5, 2008 @ 2:08 pm

  4. Anyone come across SpreadZero before? Seems to be a darkpool for equities AND fixed income

    Comment by Oxymoron — March 26, 2009 @ 5:23 pm

  5. SpreadZero – interesting chaps with an interesting business model.

    The alternative execution space for Fixed Income is starting to warm up as the incumbent players stumble towards buy-side to buy-side trading and the sell side realises that without balance sheet they are simply acting like riskliess principals. And riskless principles that still want a spread are ripe for disintermediation in an electronically connected world…

    Buy-side to buy-side corporate bond IOIs anyone???????

    Build it and they will come….

    Comment by John Greenan — March 31, 2009 @ 8:42 am

  6. From what i’ve read the Blackrock Aladdin Trading System concept sounds a lot like a Fixed Income Liquidnet

    Comment by oxymoron — June 17, 2012 @ 4:10 pm

    • The Blackrock Aladdin “concept”…

      Hmmm. Is it real, a work in progress, vapourware, a threat or the future?

      I think the chaps at Blackrock are smart. But do they really expect that they can get a decent crossing rate between their clients? I doubt it.
      Feels like me to be a game-theoretic approach to beating up brokers. Very happy to be proven wrong…

      Comment by John Greenan — June 18, 2012 @ 4:18 pm

  7. It seems to have some momentum…

    Comment by oxymoron — July 26, 2012 @ 11:50 am

  8. SO Aladdin has an internal matching engine! Wow all that money to develop what equities have had for a long time. SO If it works all Aladdin clients could effectively hook in to this. So what if a client after 3 years or so moves to another OMS

    Comment by Walter — September 2, 2012 @ 11:22 am

  9. and so eventually …..

    Fixed income
    Oct 31, 2013
    Liquidnet actively exploring bonds trading role

    As widespread buy-side demand increases for new electronic bonds trading platforms, institutional block crossing dark pool Liquidnet has indicated its interest in operating a fixed income venue, but said it has no firms plans at this stage.

    John Kelly, COO of Liquidnet, said fixed income was a complex market and many solutions that have proved effective in equities would not suit a bonds trading platform.

    “We do not have any concrete plans yet to launch anything but we are actively looking into this,” he told

    “Corporate and treasury bond liquidity is one of the biggest problems that has to be solved in capital markets the world over and it’s an issue our buy-side members continue to raise with us,” Kelly said.

    Recent regulatory regimes including Basel III’s Liquidity Coverage Ratio, which requires banks to hold larger reserves of high quality assets to cover cash outflows, and expected requirements under the Volcker rule have caused banks to scale back their inventories of fixed income products, reducing liquidity for buy-side participants.

    A report released this week from TABB Group showed 77% of 25 of the largest US buy- and sell-side firms agreed a new alternative trading platform for corporate bonds could succeed in attracting market share from existing platforms.

    This suggests support for a Liquidnet offering is ripe amongst asset managers faced with increasing difficulties in trading less-liquid fixed income products.

    “At Liquidnet we are about solving problems to make markets more efficient. We did that with trading large blocks of equities and now many of our members are approaching us about making the fixed income market more efficient – which is a very different market,” Kelly said.

    Comment by jim whitehead — November 7, 2013 @ 6:30 pm

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