Get a 360 degree view of US markets and trading behaviours this year, with Michael Daley of T Rowe Price, Mike Sobel of Trumid and Ryan Raymond of LGIM USA.
With growing electronification across credit, buy-side traders are able to execute orders more effectively than ever before. Portfolio trading is booming, and automated trading is being directly impact according to buy-side traders.
If traders have the right access to data and analytics they can get far better execution quality through a combination of dealer relationships, electronic trading platforms and pre-trade information.
Interview Transcript:
Dan Barnes: Welcome to Trader TV your insights into institutional trading, I’m Dan Barnes. Credit traders in US markets are rapidly evolving the way they execute orders into the market. Here to discuss that trend are Michael Daley of T.Rowe Price, Ryan Raymond of LGIM and Mike Sobel of Trumid. To start with, what are the dynamics impacting market liquidity in credit today?
Mike Sobel: Liquidity in the marketplace this year has been quite strong in ways and for reasons that we think are sustainable. So Trace ADV is up 20-25% versus a year ago and that is definitely above trend growth. I think we’re beginning to see the increase in velocity or turnover in the U.S. credit asset class that we’ve been kind of hoping for, waiting for, I think reasonably expecting. And that comes from better tools than we had a few years ago. Tools to access the market, more transparency, more efficiency, data-driven decision-making, and more participation from kind of non-traditional market players. Systematics are playing a bigger role in the market. Retail is playing a bigger role in the marketplace.
Ryan Raymond: I think the obvious answer is portfolio trades. We’ve been talking about these for years, but really this year is when we’ve seen broad adoption across all different kinds of counterparties and with that different styles of portfolio trades as well. Right now they’re about 10% of Trace volumes, but it really feels like it’s higher than that, and we’re growing, and I expect this to be a bigger and bigger part of what we do. When I think about how we react to portfolio trades at LGIM, we look at what are the X’s on the follow and how can we best suit our clients by executing portfolio trades ourselves.
Read the full transcript on tradertv.net