AI-driven fixed income analytics and trade workflow automation provider Overbond has integrated Neptune Networks’ axe data in a bid to enhance both the accuracy and functionality of Overbond’s analytics and the trade automation capabilities for existing Neptune buy-side clients.
Vuk Magdelinic
Speaking to The TRADE, Vuk Magdelinic, chief executive of Overbond, explained: “A lot of buy-side firms, depending on their portfolios of course, look to Neptune basically to discover price and size most efficiently. This service is augmented now with a systematic integration of Neptune real time data and an algorithm that can then do deeper comparison both in real time and historical, digesting more data and bringing the insights to buy-side desk faster and in a more robust way. It’s essentially a levelling up of the Neptune benefits.”
The move will enhance client-specific analytics for corporate trading execution as well as providing Neptune Networks, a fixed-income pre-trade market utility, with the latest in AI size-adjusted pricing and liquidity discovery.
Byron Cooper-Fogarty, chief operating officer at Neptune, said: “Neptune has always responded to buy-side demand for connectivity to core workflow and analytical tools. The integration with Overbond is the latest step in that process.”
In addition, Overbond is also set to expand the securities covered by its analytics and trading algorithms through the incorporation of Neptune data into each single-tenant client environment, on request.
While sell-side fixed income desks have distributed axes to clients to signal which securities they are most interested in buying and/or selling for some time, buy-siders instead use this information to execute large trades, optimise order allocation and source liquidity for less liquid securities.
Read more: Bond traders increasingly managing execution rather than partaking
“This is at the end of the day data integration. Obviously, the Overbond product on its own already has capability to aggregate different data sources to produce recommendations on size, routing, and obviously liquidity profile and market price per security, but the Neptune data inclusion for buy-side shops makes the dealer quotes and execution component of that aggregation more robust and extends the coverage and precision and relevance of the signals for particular buy-side desks. It’s a client-specific solution.” Magdelinic said to The TRADE.
Following this integration, Overbond AI is set to utilise axe data provided by Neptune to enhance its size-adjusted pricing, with plans for this to be included in its analytics and trade automation suite.
Read more: Overbond unveils new artificial intelligence-based smart order routing system
Last September, Overbond unveiled its smart order routing (SOR) algorithm, aimed at addressing the time-consuming and challenging process of allocating trades via the best execution route.
Specifically, it uses historical information alongside current dealer axes, unique to clients, to determine the optimal dealer to engage for a specific security, given current market conditions. The live axe data from Neptune will further enhance the precision of the Overbond SOR algorithm, according to the business.
Speaking to future plans, Magdelinic told The TRADE: “I think with increased buy-side adoption we will look to deploy our next generation smarter order router, which helps buy-side desks with recommendation of where to route – not just amongst the dealer inventory choices, but also with regards to the venues and protocols they’re connected to.”