Trade Automation: The Perspective of a Midsize Merchant

Record the use of automation on MarketAxess

Market axis, operating a fixed income electronic trading platform and providing market data and post-trade services, has had record use of automation in the first quarter of this year as clients are looking to increase efficiency across products and regions geographic.

Gareth Coltman, Global Head of Trading Automation at MarketAxess, told Markets Media that despite the increase in volatility in the first quarter of this year, there has been growing recognition that electronic trading is one way. excellent for staying in touch in times of market stress and this is mirrored by the growth of MarketAxess’ range of tools and protocols.

“It’s not about customers returning to old ways of doing things when volatility comes,” he said.

Rick McVey, CEO of MarketAxess

Rick McVey, MarketAxess

Rick McVey, president and chief executive officer of MarketAxess, said during his first quarter results presentation that trade automation hit a record in terms of trade volume, trade count, and active customers.

Coltman said, “These tools are being institutionalized in traders’ workflows and clients are increasingly dependent on these tools to perform significantly higher volumes of business.”

It highlighted the growth in the use of Auto-X despite the increase in volatility, which was in contrast to the decline in use during the pandemic.

Auto-X enables purchase-side customers to automate the submission and execution of request for quotation (RFQ) orders. As spreads widen, Auto-X automatically adjusts to make sure that trades take place in the context of the market and questionable trades are sent back to the human trader for valuation.

Source: MarketAxess

“Customers have been willing to push the boundaries in terms of automation,” said Coltman. “They were initially focused on investment grade products in the US and Europe, but we are starting to see traction in other products and across Asia.”

MarketAxess also had a record quarter of Auto-Responder use with nearly 8,000 auto-generated responses, which Coltman says has created significant cost savings for customers. Open Trading Auto-Responder allows buy-side clients to automatically respond to incoming RFQ opportunities in Open Trading, the company’s comprehensive trading model.

“I spoke to a client who was replying on a wide range of high-performing names,” he added. “They can set it up in advance so you never miss the opportunity to take advantage of that cost savings when it’s available.”

MarketAxess is also experimenting with auto responder related workflows with, for example, the ability to initiate RFQs at the end of the day.

Additionally, this year MarketAxess is actively developing technology for Adaptive Auto-X to create more sophisticated workflows for clients and enable them to utilize MarketAxess’s various liquidity pools. Adaptive Auto-X connects multiple trading protocols available through Open Trading.

For example, a client may want to seek passive liquidity in multiple sources at the same time.

Gareth Coltman, MarketAxess

Gareth Coltman, MarketAxess

“A client would be able to set the parameters for their workflow and interact with liquidity wherever it is available through a range of protocols,” said Coltman. “Customers see this as a natural next step in the market structure.”

Also, due to the growth of exchange-traded fixed income funds, there is a lot of interest in trading the new protocols for bonds found in an index.

In March 2022, MarketAxess launched the MKTX US Investment Grade 400 Corporate Bond Index, which uses its Relative Liquidity Score and Composite + pricing engine to build an index that has improved liquidity, transparency and high availability. of the constituent obligations.

MarketAxess is also thinking about innovative ways for clients to trade large blocks without having a significant impact on the market, particularly in difficult market conditions.


MarketAxess reported revenues of $ 186.1 million in the first three months of this year, which was the second-highest level of quarterly revenue ever.

Total average daily trading volume increased 22% from a year ago to a record $ 37.5 billion, mainly driven by historic high daily average volumes of $ 25.1 billion in the US Treasury, in emerging markets of $ 3.1 billion and in municipal bonds of $ 288 million.

Average daily total credit volume in the first quarter was $ 12 billion, down 3% year-on-year, but it is still the second best quarter of total credit trading volume.

McVey said in a statement, ‚ÄúThis strong performance reflects the excellent progress we have made in executing our growth strategy, expanding our geographic diversification and creating a broader foundation for growth. We have achieved these results as market conditions continue to improve, with wider spreads and greater spread volatility resulting in significant cost savings for our clients through Open Trading, our differentiated liquidity pool. “

MarketAxess said Open Trading achieved approximately $ 201 million in transaction cost savings for clients in the first quarter of this year, surpassing levels from a year ago.

Source: MarketAxess

“The use of Open Trading is ubiquitous within our customer base and firmly established as a standard part of the workflow,” said Coltman.

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