Free Site Registration

Unbridled Growth

Traders Magazine Online News, May 30, 2018

Staff Reports

It all began two years ago.

Tradeweb, one of the world’s leading electronic trading platforms entered the U.S. ETF market in 2016 and has never looked back. The firm’s ETF trading platform connects institutional investors to OTC markets in U.S. ETFs and has become a leading player in just two years.

Building on the success of their sister ETF platform in Europe, Tradeweb’s U.S. ETF offering complements the firm’s broader, well-established institutional trading platform – which has expanded substantially from its start 20 years ago as a bond-trading platform to provide over 25 markets across multiple asset classes. Tradeweb pioneered the multi-dealer, in-competition request-for-quote (RFQ) protocol for the electronic trading of U.S. treasuries and the RFQ protocol has now proved it can unlock ETF liquidity for institutional investors.

Booyah for the buy-side as it continues to search for alpha and more efficient ETF execution. And the ETF sector is booming, as Deutsche Bank Asset Management reports the market has swelled to $4 trillion from just $1 trillion in 2008.

And Tradeweb stands ready to meet this growing demand from institutional investors. In just two short years, Tradeweb has seen ETF trading on its U.S. electronic platform grow and grow. Back in 2016 at the platform’s inception, notional value of executions totaled $2 billion in the first quarter of 2016 and has grown steadily every quarter since to over $22 billion in the first quarter of 2018. More than $110 billion in U.S. ETFs has been executed on Tradeweb by over 100 buyside institutions. For a new entrant in the U.S. ETF market this rate of growth is impressive.

In speaking to Traders Magazine, Adam Gould, Head of U.S. Equity platforms at Tradeweb explained the rapid growth. “We launched our platform in early 2016 by expanding Tradeweb’s RFQ model to U.S. ETFs. At the outset, we had 6 liquidity providers which quickly grew to 22 as the buy side embraced our offering as a more efficient way to access competitive liquidity as well as streamline their workflow and demonstrate best execution”.

Gould explains how it works “in our platform clients can come in and request a one-way or a two-way market on any U.S. ETF and choose to execute either on risk, NAV or market-on-close. They simply submit one trade ticket to send multiple price requests to up to five liquidity providers simultaneously. It’s this competition between liquidity providers that creates aggressive pricing and efficient access to liquidity for block trades."

The whole process is efficient and economical – just what the buy-side wants.

For more information on related topics, visit the following channels:

Comments (0)

Add Your Comments:

You must be registered to post a comment.

Not Registered? Click here to register.

Already registered? Log in here.

Please note you must now log in with your email address and password.