MTS Markets , part of London Stock Exchange Group (LSEG), has added list trading functionality to its MTS BondsPro corporate bond trading platform, enabling participants to execute many trades simultaneously. TMTS reports that there is US$17 billion+ of real-time resting corporate bond liquidity on MTS BondsPro.
After uploading a list of orders to MTS BondsPro, participants can connect with multiple liquidity sources in the platform’s anonymous all-to-all order book and execute on the best price for each trade. List trading allows firms to execute trades with multiple liquidity sources at the same time.
MTS BondsPro connects over 600 broker dealers and buy-side clients within its anonymous all-to-all order book for corporate and emerging market bond trading, providing a reported 80,000 prices daily. The firm reports that trading activity on the platform doubled from July 2017 to July 2018, and its market share has grown 10% since June 2017 as participants continue to seek more liquidity in a challenging corporate bond market environment where credit spreads have widened significantly. The gap between corporate bond yields and underlying government yields continues to expand as the Federal Reserve raises interest rates and winds down its balance sheet.
Larry Tabb, founder of the financial markets research and advisory, Tabb Group, says “The reallocation of fixed income portfolios generally do not generate single bond trades but spawn multiple transactions. This means that buy-side traders are typically tasked with sourcing liquidity for dozens if not hundreds of bonds, in various sizes and liquidity profiles. Creating a more efficient list trading process will not only help institutional fixed income traders focus on large and more difficult trades, but enable investors to source liquidity from more sources and at better prices. This will help improve fixed income investors’ performance and productivity.”