MarketAxess says ‘Uber-like’ rankings help quote reliability

Ranking system helps deter traders from ‘misbehaving’ as firm reveals 65% hit rate on fixed income trades.

MarketAxess told the Trade an ‘Uber like’ ranking system implemented on its fixed income platform has helped to improve the reliability of quotes and prevent bad behaviour.

It also revealed a 65% success rate on the amount of volume inquired compared to the volume executed for European fixed income trades.

Traders have warned against the impact of MiFID II’s pre-trade transparency rules, and MarketAxess’ ranking system is one of the ways it said it is trying to combat information leakage and price manipulation.

The ranking system, which is automated and based on factors like response rates and inquiry commitment, has acted as a deterrent for ‘misbehaviour’, MarketAxess said. 

Chief operating officer at MarketAxess Scott Eaton also explained to the The Trade that the most successful fixed income trading platforms will depend on its ‘established network’.

Eaton said: “It’s all about connectivity – incumbent platforms will likely see greater success due to the established network of investor clients and dealers active on their systems.”

The firms overall trading volumes were up 27.2% in the first quarter this year compared to the same period last year.

In 2015, Trax processed 1.1 billion transactions of which, 13.3 million were fixed income transactions.