Tradeweb Markets surges past $1.80 ADV in November

abdelaziz Fathi

Tradeweb Markets Inc. (Nasdaq: TW) has reported a total trading volume of $38.2 trillion and a record average daily volume (ADV) of $1.80 trillion for November 2023. These figures mark a 59.2% year-over-year increase.

The rates segment at Tradeweb, a global operator of electronic marketplaces for a diverse set of asset classes, saw a notable rise, particularly in U.S. government bonds where the ADV increased by 19.5% year-over-year to $163.7 billion. This growth was driven by a combination of factors, including increased adoption across various trading protocols, client sectors, and continued market volatility, with retail markets influenced by higher interest rates.

Tradeweb is set to expand its scope in the fixed income trading arena by incorporating an algorithmic technology provider into its network through the acquisition of r8fin. The latter focuses on US treasuries and interest rate futures, catering to a clientele comprising hedge funds, systematic hedge funds, professional trading firms, and primary dealers.

This acquisition follows Tradeweb’s recent purchase of Yieldbroker for A$125 million, which was announced in May and finalized in August. This move aligns with the venue’s overarching strategy for growth through strategic acquisitions in the market.

European government bond trading also experienced a surge, with the ADV up 30.5% year-over-year to $44.8 billion, bolstered by market volatility and strong trading volumes from hedge fund accounts.

The mortgage market witnessed a 16.7% year-over-year increase in ADV to $188.3 billion, primarily driven by strong To-Be-Announced (TBA) volumes and a rise in specified pool activity. In the credit market, fully electronic U.S. credit ADV grew by 32.0% year-over-year to $6.1 billion, with Tradeweb’s share of fully electronic U.S. High Grade and U.S. High Yield TRACE at 16.7% and 7.0%, respectively.

European credit ADV was up 29.7% year-over-year to $2.3 billion, supported by strong activity in portfolio trading and automated intelligent execution. However, municipal bonds ADV saw a slight decrease of 0.2% year-over-year to $475 million, with institutional asset managers actively engaging in tax loss harvesting. Credit derivatives ADV declined by 7.8% year-over-year to $9.8 billion, influenced by tighter credit spreads and reduced overall swap execution facility (SEF) market activity.

The equities segment also recorded growth, with U.S. ETF ADV up 4.5% year-over-year to $7.0 billion and European ETF ADV increasing by 10.0% year-over-year to $2.6 billion. This was a reflection of robust institutional client engagement in the U.S. and an overall positive trend in the European ETF market.

Lastly, the money markets segment, particularly repurchase agreements, saw a significant uptick with the ADV rising by 35.2% year-over-year to $534.7 billion. This growth was driven by increased adoption of Tradeweb’s electronic trading solutions and shifts in U.S. market conditions, with retail money markets activity continuing to be strong as interest rates remained elevated.

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