Introducing DealerAxess
Combining the best of liquidity and white glove service.
After 25 years of working for traditional IDBs and in sales trading roles, I had a front-row seat to the inefficiencies in the dealer-to-dealer markets. Why aren’t dealers interacting with each other the way they do with the buy-side? Why hasn’t electronification reached the same levels of the dealer-to-client models? In this blog series, I’ll explain why I left the IDB world for electronic trading, and I’ll discuss the benefits it unlocks for the global dealer community. I’ll start by looking at liquidity.
As I started to see liquidity move away from traditional avenues of voice trading via IDBs, I knew the next step in my career was to join the revolution and move to a leading electronic platform. I’m pleased to be a part of the newly formed DealerAxess team at MarketAxess.
The purpose of the DealerAxess team is to help you tap into larger pools of liquidity than with your IDBs. Through anonymous RFQs and mid-price matching sessions you can unlock liquidity and save money. Our DealerAxess team works closely with our Open Trading® and Dealer Sales desks to help you understand how to get more out of our dealer liquidity protocols.
Our two flagship dealer protocols are Dealer RFQ (DRFQ) and Mid-X. Dealer RFQ is an agile way of offloading unwanted risk and finding new opportunities in the market and connects you to our unique Open Trading liquidity pool—the world’s largest for corporate credit. This network is larger and more diverse than traditional IDB networks. In addition to including the traditional interdealer network you’re familiar with, Open Trading enhances this liquidity pool with the addition of non-dealer counterparties. This additional liquidity is game-changing as 25% of trades are executed with a non-dealer counterparty. This diversity of choice leads to better prices and liquidity, even when markets are volatile.
Mid-X is our session matching protocol that runs on our award-winning predictive pricing engine, CP+™. By running through the Open Trading network, Mid-X brings together a large community of sell-side and ETF liquidity providers to participate in the session and intelligently optimises for matching possibilities. Mid-X gives you an alternate liquidity channel and its anonymity means there will be no information leakage.
There are lots of exciting developments coming exclusively for our dealer community. In the next blog, I will discuss how the DealerAxess team provides a hands-on service for dealers.