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Fixed Income Trading Models: Convergence Ahead? – Markets Media 

Full Article: Markets Media

You’re going to have a portion of the buy side that will continue to do their business through the RFQ model, but at some point, there’s going to be integration with or into the CLOB model

Comments
  • ChipperJune 5, 2017"It is interesting to hear Tradeweb say that one of the bifurcated OTC markets they offer (U.S. Treasury Securities) may be poised to converge into a non-bifurcated marketplace open to all participants. After all, it is Tradeweb that has kept these markets bifurcated at the behest of the traditional dealers. I agree that the emergence of non-traditional dealers in the Treasury market has the potential to move it towards an all-to-all model, but it will be very difficul…"
  • Goose
    GooseJune 2, 2017"I agree that the PTF/HFT can become more of a counterparty for the buy side, they are indirectly doing it now thru the IDB screens. However, unless they decide to begin to warehouse risk on a large scale, they will be provide liquidity for the threshold size they feel comfortable holding very short term. So off the run issue market making does not seem to fit that bill, nor large size on the run. I could see the LOB growing in volume for on the runs as you have more c…"

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2 Comments on "Fixed Income Trading Models: Convergence Ahead? – Markets Media "

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Goose
Member
I agree that the PTF/HFT can become more of a counterparty for the buy side, they are indirectly doing it now thru the IDB screens. However, unless they decide to begin to warehouse risk on a large scale, they will be provide liquidity for the threshold size they feel comfortable holding very short term. So off the run issue market making does not seem to fit that bill, nor large size on the run. I could see the LOB growing in volume for on the runs as you have more cp in the same place, but the individual trade sizes… Read more »
Chipper
Member
It is interesting to hear Tradeweb say that one of the bifurcated OTC markets they offer (U.S. Treasury Securities) may be poised to converge into a non-bifurcated marketplace open to all participants. After all, it is Tradeweb that has kept these markets bifurcated at the behest of the traditional dealers. I agree that the emergence of non-traditional dealers in the Treasury market has the potential to move it towards an all-to-all model, but it will be very difficult for it to happen until the traditional dealers allow it. The traditional dealers act very much like a cartel in the OTC… Read more »
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