Buy side using compression tools to create, not destroy

Custom-trading services are booming at Bloomberg and Tradeweb, but not for the reasons intended

Euro Squeeze

Designed to wipe out trades and reduce risk, trading platforms’ compression tools are increasingly being used to do the opposite, an accidental innovation that has become the primary way for some buy-side firms to trade.

Features of the tools that allow users to create precisely offsetting trades that can be fed into the compression process can also be used to design custom transactions – potentially improving pricing, cutting costs and reducing the burden of new reporting requirements.

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