MarketAxess announces first algo trade using Adaptive Auto-X

Rick Steves

“As the fixed income market becomes more complex and finding liquidity becomes more challenging, buy-side firms need to be armed with smart trading tools that can efficiently seek liquidity across a broad set of protocols while avoiding market impact.”

MarketAxess has announced the first client algorithmic trade executed across multiple protocols using Adaptive Auto-X, the firm’s new multi-protocol automated execution solution currently in pilot.

The electronic trading platform for fixed-income securities has entered the next phase of the pilot, which will introduce additional liquidity-seeking strategies depending on trader objective, urgency, or pricing requirements.

The company argues that Adaptive Auto-X’s intelligent automation can deliver greater alpha-generation opportunities for MarketAxess clients.

Adaptive Auto-X helps seek liquidity while avoiding market impact

Gareth Coltman, Head of Automation Product at MarketAxess, said: “As the fixed income market becomes more complex and finding liquidity becomes more challenging, buy-side firms need to be armed with smart trading tools that can efficiently seek liquidity across a broad set of protocols while avoiding market impact. Adaptive Auto-X is an exciting leap forward in intelligent automation which can deliver greater alpha-generation opportunities for MarketAxess clients.”

The Adaptive Auto-X pilot was launched earlier this year. Phase one of the pilot provided users with low-friction automation workflows to interact with passive liquidity across RFQ, order book, and other matching protocols.

Users can specify a protocol or use data-driven, smart-order-routing to maximize the potential liquidity sources leveraged across multiple MarketAxess trading protocols and liquidity pools. Adaptive Auto-X combines proprietary MarketAxess data and predictive AI-driven analytics to bring even more workflow efficiency to automatic trade execution.

In Q1 2023, the first pilot clients were able to place a resting order that simultaneously connected to multiple liquidity pools via MarketAxess’ first-of-its-kind algorithm: CP+ Peg. Clients are able to control their algorithms by customizing sizing, visibility, and pricing parameters in real-time.

Automated trading on MarketAxess has been used by more than 200 active clients since inception, amounting to over $750 billion in volume and over 4 million trades, the firm stated, adding that, year to date, automation protocols represent nearly 10% of total trading volume on MarketAxess.

MarketAxess, Tradeweb, Bloomberg launch fixed-income CTP in Europe

In May, MarketAxess announced a joint venture with Bloomberg and Tradeweb to establish an independent company with the aim of becoming the fixed-income consolidated tape provider (CTP) in the European Union.

This initiative is subject to relevant regulatory approvals and is part of the public procurement procedure. The goal is to deliver a high-quality consolidated tape (CT) that enhances transparency and provides access to reliable data. The trio said they are committed to improving the fixed income ecosystem and making a significant investment to secure the tender for the European bond CT.

Neil Ryan, an industry veteran with extensive experience in the fixed income space, has been appointed to lead the CTP initiative. He will work on developing a comprehensive prototype that leverages the expertise of the three vendors in fixed income markets and trade reporting.

FINBOURNE was chosen as the technology infrastructure provider to build and operate the consolidated tape (CT) for the joint venture company.

The joint venture between Bloomberg, MarketAxess, and Tradeweb has been underway since June 2022. At the time, the leading vendors publicized plans to become the consolidated tape provider through the public procurement process led by the European Securities and Markets Authority (ESMA).

The three entities also initiated a competitive request for information process to evaluate various independent third-party partners capable of providing the consolidated tape service.

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