Trading protocols in fixed income are multiplying and becoming more dynamic, placing demands on trading desks that only an EMS can manage.
An execution management system (EMS) designed for fixed income could help to handle the nuances and complexities of the bond markets that platforms repurposed from other markets fail to do. In turn, allowing buy-side traders to connect their orders with new trading protocols and greater automation, and more easily, could help to evolve a trading team’s capabilities.
AxeTrading has targeted this gap in the market, linking with 45 APIs to 22 venues, and building a platform for bond trading that can support the expanding execution choices traders face, based on a more data-led trading style.
Dinos Daborn, chief operating officer and co-founder of AxeTrading spoke with The DESK about the firm’s approach to better execution.
How are you able to accommodate new trading protocols that platforms and dealers are launching?
Our modular, transparent and flexible open architecture provides a streamlined scalable product that integrates with the firm’s existing order management systems and with FIX interfaces to connect with 3rd party software systems.
AxeTrading embraces the principles of interoperability to give traders seamless control of their workflow. Some other platforms look to constrain and create a walled garden forcing users to be dependent on a limited range of options. We free them to make best use of their existing systems, diverse trading protocols and the latest augmented data.
Which functionality do you see as a key differentiator for you over the next 12 months?
By using the know-how developed for the sell side, AxeTrader enables the buy side to go beyond being a reactive price-taker and become an active market participant with price making capability alongside dealer liquidity and on trading venues.
AxeTrader provides data aggregation from all the available sources within the firm, through a range of normalised APIs, to aid best execution and to achieve enhanced trading alpha. The buy-side firm continues to control all their own data in real time and access algo trading, business insight and execution strategies and tools.
Building on our award winning EMS – that already makes prices, manages RFQs and helps achieve best execution across multiple execution platforms and trading venues – we are enhancing portfolio trading, expanding the capabilities of our advanced rules engine for smart order routing, auto trading and TCA capabilities.
What are the greatest opportunities for buy-side traders in finding efficiency and better execution through technology?
The buy side would benefit enormously from embracing the big data analytics and artificial intelligence (AI) tools that are necessary to crunch the vast amount of new data generated in fixed income. This has to start by aggregating runs, axes, venue and single dealer liquidity, as well as normalised market data, in a single, clear, customisable view of the fragmented fixed income market.
They need interoperability to reach across more venues, using a dealer-grade pricing engine technology that enables them to run and develop internal pricing models to benchmark the quotes they receive. They also need to expand their direct connections with the sell side in addition to more effective use of as broad as possible a selection of trading venues and protocols.
©The DESK 2020