Cboe brings FX market expertise to US Treasuries with new trading platform

Rick Steves

Cboe Fixed Income is designed to address some of the biggest challenges that dealers face today, including flow segmentation, information leakage and high hedging costs.

Cboe is about to launch a new dealer-to-dealer electronic trading platform for On-The-Run US Treasuries.

Cboe Fixed Income, planned for launch in the second quarter of 2022, will be Cboe’s first cash US Fixed Income product offering.

The trading platform leverages the successes of Cboe FX to enable dealers in US Treasuries to source liquidity and trade in size while reducing market impact.

Cboe Fixed Income will bring its large order risk transfer capabilities together with its liquidity curation and analytics to further enhance trading in US Treasuries, thus creating a high-value offering that differs from other interdealer trading models in the marketplace.

Liquidity consumers will be able to transact against the best quote from a single liquidity provider, while satisfying the full amount of the order to help minimize information leakage and slippage.

Support for customized liquidity curation, flow analysis, insights, and trading optimization are a few of the benefits of using the new trading platform.

Cboe Fixed Income is in the process of registering with the Securities and Exchange Commission (SEC) as a government securities broker-dealer and becoming a member firm of the Financial Industry Regulatory Authority (FINRA).

Jonathan Weinberg, Senior Vice President and Head of FX and US Treasuries at Cboe Global Markets, said: “We are excited to bring the best of what we do in the global FX market to the US Treasuries space. Cboe Fixed Income is designed to address some of the biggest challenges that dealers face today, including flow segmentation, information leakage and high hedging costs.

“We believe the new trading platform will provide a unique solution that enables liquidity providers to interact directly with high- quality order flow, reduce market impact and receive opportunities for price improvement. ”

Ed Tilly, Chairman, President and Chief Executive Officer of Cboe Global Markets, said: “With our footprint covering the world’s largest and most liquid marketplaces, we are excited to enter the US Treasuries market and further broaden Cboe’s market operations on a global scale.

“Fixed Income represents an untapped market for Cboe with many exciting product possibilities, and we look forward to extending our innovative technology and trading solutions to this asset class to serve an even broader base of market participants.”

 

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