Live-Markets and the innovative hedge funds using it

At a time when interest rates demand that funds perform, hedge funds are emerging as the new ‘liquidity begets liquidity’ bastions and with that they are seeking new, forward-thinking trading and data solutions.

MarketAxess has observed this evolution across our businesses; when looking at trading protocols, some of the earliest adopters come from the hedge fund client base. Live Markets, MarketAxess’ order-book solution for credit trading, allows users to make firm markets as well hit/lift posted positions. Since its launch, hedge fund interactions with Live Markets has grown 275%. The functionality is often intuitive to the client base given the fact that the product often naturally suits their strategy processes.

Now more than ever, the quality and prevalence of data is critical during every phase of the execution process. This is true when requesting quotes, but the nature and need alters when clients are looking to predominately provide liquidity – as the leveraged community, via Open Trading®, often is. Liquidity provisioning is at the heart of protocols such as Live Markets – we have ultimately seen a rapid growth in interest in our data solutions from hedge funds.

In short, while the combination of insightful data and evolutionary protocols remains in vogue, accounts at the forefront of these changes no longer only reside in the traditional asset management community. The level of current risk-free returns affects all market participants, meaning the search for unique or unknown areas of alpha becomes ever more crucial. MarketAxess has built and continues to build products to support clients in this hunt – and hedge funds are capitalising upon it.