is a different beast to equity. It gets more
complicated with lots of different iden-
tifiers in each name, different minimum
lot sizes, maturities, currencies and so on
which makes it more difficult to trade.”
Getting over this hurdle has been one of
the key focus areas for many venues keen
to push the advantages of trading fixed
income with other buy-siders.
“If a client is interested and can get
a natural match then the trade is done
without any market impact and closer
to the mid-price,” says Gareth Coltman,
head of European product management,
MarketAxess. “It is probably the optimal
form of execution in terms of cost.”
Reliance on sell-side
MarketAxess’s All-to-All Open Trading
marketplace which connects fixed income
buyers and sellers, delivered an estimated
$100 million in cost savings to users in
2016, says Coltman. And he believes that
more buy-siders are looking to electronic
platforms as a way to connect with each
other. The company has been running its
Open Trading marketplace since 2012.
The venue had 655 users on it by October
last year—up from 375 in 2015—some 75%
to 80% of which are from the buy-side.
Pioneer’s Berwick says that MarketAxess Open Trading has helped link the buy-side to a larger market. It is particularly
useful for smaller orders.
“While it might not be used for larger
over $10m size orders, it is effective for
smaller orders in particular where the
buy-side has a restricted broker list,” he
Nonetheless, the market remains a way
off from doing away with the sell-side.
While MarketAxess’ platform initially
began as a pure buy-side to buy-side
connector, it was decided early on to allow
sell-siders into the fray to boost liquidity.
“Buy-side to buy-side trading has
become more prevalent, particularly
through electronic trading platforms such
as MarketAxess which has moved into our
top 10 counterparties in the US,” says Tim
“Buy-side to buy-side trading has become more prevalent,
particularly through electronic trading platforms.”
TIM KURPIS, FIXED INCOME TRADER, ALLIANCEBERNSTEIN