
Lutnick Offers $20,000 Per Month to Trade on New Treasury Platform – FT
June 29, 2017 \
4 Comments
Full Article: Financial Times
The decision to offer a financial reward to market makers — the financial institutions that commit to offering prices for other investors to trade — draws on similar practices that already occur more commonly in equity and futures markets.
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4 Comments on "Lutnick Offers $20,000 Per Month to Trade on New Treasury Platform – FT"
“When you see that trading is done, not by consent, but by compulsion—when you see that in order to produce, you need to obtain permission from men who produce nothing—when you see that money is flowing to those who deal, not in goods, but in favors—when you see that men get richer by graft and by pull than by work, and your laws don’t protect you against them, but protect them against you—when you see corruption being rewarded and honesty becoming a self-sacrifice—you may know that your society is doomed.”
I’m undecided on this (and it’s not my area). The inducement is equivalent to 40MM turnover on a 5c bid-offer; across the 0-10Y curve that’s a reasonable estimate and pure bid-offer so it’s more like a 100MM bid-offer in the reality of where MMs trade. So 2 days P&L to get involved? Better than any other offer out there away from being a big shop. Paying 25 accounts this fee for a year makes complete sense to fulfill a virtuous circle to become a liquidity hub.
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