“Taking out any of the steps of manual work flow was really important in March so people could focus on risk,” Bruner said. “They were less worried about exact price, and more worried about moving an entire risk profile.”
Bloomberg LP, the parent company of Bloomberg News, competes with Tradeweb, MarketAxess and Trumid in providing fixed-income trading services.
That also led to record volumes in portfolio trading, a relatively new practice that can price and sell a bundle of hundreds of bonds in minutes. Barely a concept three years ago, it is now a fast-growing part of the market. New data-analysis tools that allow prices to be fully automated are part of the reason that traders have seen their ranks greatly thinned in recent years.
The pace of tech innovation and disruption won’t be slowed by the events of March -- in fact, it will continue to gain speed, said James Switzer, global head of fixed-income trading at AllianceBernstein Holding LP. In March and April, his firm boosted by 500% its usage of MarketAxess’s all-to-all protocol, which allows for anonymous trading and can match investors with each other, as well as banks, on the other side of a transaction.
“That’s what’s going to come out of this, a desire by the buy side to embrace all-to-all trading because we can’t always depend on dealer balance sheets,” Switzer said. “If we have to find the other side of the trade in an anonymous all-to-all fashion, we’ll do it.”
Electronic powerhouses like AllianceBernstein and BlackRock Inc. have forged ahead to embrace technology. While both value having traders with market experience, they’ve also expanded recruiting criteria to include coding skills.
Others like Mike Nappi, head of investment-grade credit trading at Eaton Vance, still like the old school way of getting the job done.
“We don’t have a fully automated trading desk for a reason -- I want our traders to have a sense of what’s going on in the market,” Nappi said. “We’ll never live long enough to see who the winner is. But through our careers, there are going to be humans needed, just maybe not as many.”
This article was provided by Bloomberg News.