As hedge funds and systematic traders expand their presence across global fixed income markets, advances in automation, algorithmic execution and electronic liquidity are reshaping how institutional investors engage with derivatives markets.
Tradeweb has been at the forefront of this evolution through innovations including its automation tool, AiEX; bilateral trading protocols; and integrated multi-asset execution tools.
What’s driving growth in automated swaps trading?
Flaim: Swaps markets have become increasingly electronic over the last decade, but we’re now seeing a broader evolution in how clients interact with liquidity and execution workflows. Hedge funds, systematic firms and traditional asset managers are looking to automate lower-touch trading activity while improving efficiency.
That shift is visible in trading behaviour. In 2025, automated trades represented more than 40% of institutional trades executed on Tradeweb, up from 30% in 2021.
This is particularly true in swaps markets where participants are managing larger datasets, reacting to macro events in real time and operating across multiple liquidity pools. Automation helps them scale activity while maintaining control.
Are systematic firms and traditional asset managers approaching electronic swaps trading differently?
McDiarmid: While systematic firms were early adopters of automation and data-driven execution, many traditional asset managers are now implementing similar workflows.
The focus today is less about participant type and more about use case. Clients want the ability to automate smaller or repeatable trades while retaining transparency and control for more complex execution decisions.
Traders and portfolio managers also want to connect directly into tools like Excel or Python-based analytics environments. As confidence in these tools has grown, we’re seeing clients becoming more comfortable transferring larger or more risk-sensitive trades through automated and integrated workflows while maintaining appropriate oversight.
How has volatility influenced systematic trading activity?
Flaim: Periods of uncertainty tend to reinforce the importance of resilient electronic workflows and reliable access to liquidity as clients put even more emphasis on execution efficiency, pricing transparency and operational certainty.
One of the biggest shifts we’ve seen is that electronic trading functions effectively even during periods where historically markets might have reverted toward manual or voice processes.
We saw strong activity across swaps markets earlier this year as participants responded to fast-moving conditions.
Integrated execution capabilities became more important, combining automation, dealer liquidity, data and analytics within a single workflow.
How is Tradeweb evolving its swaps offering to support this next generation of systematic trading?
McDiarmid: A key focus is expanding execution choice while maintaining flexibility for clients. We continue to invest across multiple protocols and execution models, from request-for-quote (RFQ) and request-for-market (RFM), to dealer algorithms and AiEX. Clients increasingly want to express views across products and markets rather than treating swaps trading in isolation.
That evolution has also been reflected in market breadth. Tradeweb facilitates swaps trading across 28 currencies globally, compared with just three when the platform launched in 2005.
We’re also working with clients to extend electronification into historically manual areas, including bilateral swaps and uncleared products such as swaptions. Tradeweb recently completed the industry’s first fully electronic swaption termination workflow, helping bring greater transparency and efficiency to complex workflows while preserving client flexibility.
Electronic trading is also evolving into cross-market strategies. A recent example was the first fully electronic European invoice spread trade executed via Tradeweb’s RFM protocol, connecting over-the-counter (OTC) and listed derivatives workflows.
How significant is data in swaps execution?
Flaim: It’s hugely important. Data sits at the centre of modern electronic trading.
Systematic execution depends on high-quality pricing, analytics and historical transaction data. Clients want transparency around execution quality, liquidity conditions and workflow efficiency in real time.
Tradeweb processes more than 150,000 trades daily across its global platform, generating a significant pool of transaction and pricing data that can be leveraged to support sophisticated analytics and automation tools.
Data will continue to play an important role in helping clients automate decision-making, optimise processes and improve execution outcomes as markets become more interconnected and data-intensive.
Where do you see the biggest opportunities for systematic swaps trading?
McDiarmid: The next phase will likely focus on deeper automation across complex workflows, more interoperability between products and continued expansion of portfolio-based and cross-market trading.
We continue to see strong growth in emerging markets (EM) swaps. Tradeweb’s EM swaps ADV grew from approximately $1.9 billion in 2020 to more than $47 billion in 2025, driven by the benefits of electronification, including improved efficiency, automation, transparency and access to liquidity.
We also see potential opportunities in Australian dollar IRS and Japanese yen IRS. In Japan, the Commodity Futures Trading Commission’s approval late last year for US clients to access the Japan Securities Clearing Corporation was an important market-structure milestone and may create supportive tailwinds. That comes alongside an attractive rates environment in Japan that participants have not seen for over 20 years.
Looking further ahead, we think there’s growing potential around digital market infrastructure and more continuous trading environments. Whether through tokenised assets, blockchain-enabled settlement or increasingly connected workflows across traditional and digital markets, the underlying