Cboe expands into fixed income US treasuries with interdealer trading platform

The new dealer-to-dealer electronic trading platform for on-the-run Treasuries expected to launch in the second quarter next year will be Cboe’s first cash US fixed income product.

Cboe Global Markets has set out plans to move into the fixed income markets with the launch of a new US Treasuries trading platform.

Due to launch next year, the dealer-to-dealer electronic trading platform for on-the-run US treasuries will be Cboe’s first ever US cash fixed income product and is designed to enable dealers to more efficiently source liquidity and trade in size while minimising market impact.

Cboe Fixed Income will leverage Cboe’s matching protocol technology that allows for large order risk transfer with low impact alongside its capabilities in liquidity and analytics to evolve the US Treasuries market.

Cboe’s matching protocol technology, Cboe Full Amount, claims to minimise information leakage by allowing the consumer of liquidity to transact against the best quote from a single provider while satisfying the full amount of the order.

The derivatives exchange operator said the new platform will also offer single execution printing to reduce ticket costs and customised liquidity curation services to help participants manage segmentation in the liquidity landscape.

“Cboe Fixed Income is designed to address some of the biggest challenges that dealers face today, including flow segmentation, information leakage and high hedging costs,” said Jonathan Weinberg, senior vice president and head of FX and US Treasuries at Cboe Global Markets.

“We believe the new trading platform will provide a unique solution that enables liquidity providers to interact directly with high-quality order flow, reduce market impact and receive opportunities for price improvement.”

The second major move by Cboe to expand its offering with the launch of a new platform or marketplace follows confirmed plans to build out a digital asset derivatives marketplace. In October it announced an agreement to acquire regulated US-based digital asset spot market, ErisX Digital Holdings – a transaction expected to complete in H1, 2022.