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Leveraging liquidity scores and pricing data in portfolio trading

Although electronification in portfolio trading is relatively new to the corporate bond market, trading volumes in fixed income have risen steadily in the US over the past few years and are set to continue their growth there, as well as in Europe and Asia. Portfolio trading involves bundling multiple securities of varying liquidity scores into one basket that can be analysed, priced and executed as a unit. What makes this approach unique is that the deals are generally negotiated with a small number of counterparties, and then executed with a single firm.

In this podcast, Zoi Fletcher, associate commercial editor, Risk.net, talks to Matt Walters, head of product, portfolio trading at MarketAxess, about how data analytics is improving outcomes in portfolio trading, the optimal situations in which it should be used and the opportunities that come with trading vast lists of illiquid bonds.

The conversation covers:

1:13 – The foundation MarketAxess has been building since it expanded its portfolio trading functionality

3:01 – Data analytics to support the platform and improve outcomes in portfolio trading

4:47 – When to use portfolio trading and situations in which traders would have better execution through other approaches

7:44 – The possibilities presented by trading very large lists that include illiquid bonds

This audiocast was recorded on December 1, 2021

 

Learn more about portfolio trading at MarketAxess

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