When the history of the past decade of ultra-easy monetary policy by the world’s major central banks is written, there will be no shortage of candidates to illustrate how seriously those central banks distorted the world’s credit markets. 

In credit, systematic traders sort corporate obligations into buckets called carry, value, momentum and size to analyze spreads relative to credit risk, leverage, the size of the issuer and ease of trading. Factor devotees say their volatility-adjusted approach sidesteps yield-chasing and duration risk. And after back-testing, JPMorgan Chase & Co. estimates long-only factors can best the market over the long haul.  

“What we would do is we would connect with five to six of the liquidity sources, with broker dealers, and then it’s important to partner with firms like [Tradeweb] and MarketAxess to aggregate the next hundred liquidity providers. That liquidity is important to us,” she said.

We have invested heavily in the ability to source, store and digest the data. We built a data management system that allows us to systematically digest or aggregate data from pre-trade, at-trade and post-trade data and then display it to the trader to aid with their decision-making process.

A fight is brewing between financial industry heavyweights with Citadel urging regulators to scrap a proposed review of whether the disclosure of big bond trades should be delayed, pitting billionaire Ken Griffin’s firm against investment giants including Pacific Investment Management Co.

The growth of fixed-income ETFs is making it easier to determine bond prices and smoother to carry out large trades, said Sonali Theisen, head of fixed-income market structure at Bank of America. 

New issuers in B3 debt comprised 44% of all new paper that came to market in 2018, double the level in 2007, just before the last recession, which saw massive debt defaults when the subprime mortgage market collapsed.

From a trader’s perspective this ought to mean new services can appear on their desktops without any fuss or bother, where connecting them once might have been slower and more difficult. It also offers another possibility. By employing the connectivity between different systems as operational ‘hops’, trading desks 

Some of the biggest banks that serve as corporate bond dealers, including Bank of America Merrill Lynch, Citigroup, Goldman Sachs, JPMorgan, and Morgan Stanley, are actively working with their clients to help facilitate direct electronic trading.

Fixed-income hedge funds had $556 billion in assets under management, about six percent of the $9.2 trillion corporate bond market. “Given their relatively small size, it is simply impossible for hedge funds to ‘become the market’ and absorb large liquidity shocks,” according to the report.