Tradeweb trading volume soars to record $37.2 trillion in October

abdelaziz Fathi

Tradeweb Markets Inc. (Nasdaq: TW), a global operator of electronic marketplaces for a diverse set of asset classes, has reported a record total trading volume of $37.2 trillion for October 2023.

This month’s activity marks a strong uptick, with the average daily volume (ADV) setting a new high of $1.75 trillion, a 66.3 percent increase year-over-year.

The rates sector experienced notable increases across various instruments. U.S. government bonds saw an ADV rise of 27.7% compared to the previous year, reaching $163.7 billion. European government bond ADV also rose by 12.0% year-over-year to $42.3 billion. These rises have been attributed to higher interest rates igniting the retail market and ongoing volatility in rates markets which supported both U.S. and European government bond volumes.

Mortgage-related securities reported a 13.4% year-over-year increase to $193.8 billion in ADV. This jump was fueled by more involvement from fast-money accounts and an uptick in roll activity, with record specified pool volumes being a considerable contributing factor.

The electronic U.S. credit market saw a 24.9% rise in ADV year-over-year to $5.6 billion, with European credit ADV up by 27.4% to $2.1 billion. These robust volumes, particularly in U.S. High Grade credit trading, reflect growing client utilization of Tradeweb’s trading protocols. The platform’s share of fully electronic U.S. High Grade and High Yield TRACE credit volumes stood at 16.8% and 6.7%, respectively. Increased sessions-based trading and RFQ activity also propelled higher European credit volumes.

Despite these advances, municipal bonds saw a modest increase of 2.1% year-over-year in ADV, amounting to $472 million, amidst a broader market volume decrease. On the other hand, credit derivatives experienced a 24.0% decline in ADV to $12.1 billion, correlating with tighter credit spreads and a downturn in swap execution facility market activity.

The equities market presented mixed results, with the U.S. ETF ADV down 6.5% year-over-year to $7.2 billion, while the European ETF ADV increased by 24.1% to $2.6 billion. Institutional engagement in U.S. ETFs remained strong with a 10% increase in platform volumes, and despite flat broader market volumes, European ETFs recorded growth.

The repurchase agreement sector reported a 41.2% year-over-year increase in ADV to $527.2 billion. The surge was propelled by broader client adoption of Tradeweb’s electronic trading solutions and a shift in U.S. market demand from the Federal Reserve’s reverse repo facility to money markets. Additionally, high interest rates continued to bolster retail money markets activity.

Earlier in August, Tradeweb completed its acquisition of Yieldbroker, a government bond and interest rate derivatives trading platform based in Australia. This acquisition, which was valued at A$125 million, was an all-cash transaction and received regulatory approval. The move is expected to enhance liquidity, transparency, and efficiency in the fixed income market through the combined experience and innovative solutions of both companies.

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