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Trad-X SEF Reaches $1T Volume Milestone

Tradition's SEF Trad-X has seen a sharp increase in trading activity since September for USD interest-rate swaps on its central limit order book, citing its hybrid voice and electronic platform as a differentiator.

Tradition, one of the world's largest inter-dealer brokers, said its Trad-X SEF has completed its 25,000th trade last month and that total trading volumes in US dollar denominated interest rate swaps exceeded $1 trillion.

Trad-X reached the milestone trade on Friday, November 28, on the platform for trading global interest rates, which provide voice trading with a central limit order book.

According to a Trad-X spokesman, Tradition's SEF has experienced a sharp increase in trading in recent months because of the popularity of Trad-X's hybrid execution model, which utilizes both voice and electronic trading to maximize liquidity. The spokesman says that hybrid platform is what differentiates Trad-X from other SEFs.

Since the start of September 2014, Trad-X USD on-SEF volumes have experienced a sharp increase. From the beginning of September to the end of November, Trad-X executed more than 4,700 IRS trades, worth a notional value in excess of USD $540 billion.

Dan Marcus, CEO of Trad-X comments, "Tradition's SEF volumes have grown exponentially during 2014. We are now executing 96 percent of our 'on-SEF' USD interest rate swaps volumes on the Trad-X central limit order book. The adoption of this electronic and hybrid execution methodology is testament to Tradition's innovative technology, the quality of our broker support and market provided liquidity."

A large and diverse group of global banks stream two-way pricing to the platform across the most liquid USD in the most liquid USD,  Euro and GBP interest rate swap products. The platform differentiates itself through the depth and quality of its liquidity and the fact that it operates on a hybrid basis, "ensuring voice and electronic liquidity are combined and operate on a seamless and symbiotic basis," states the company. The hybrid platform is what differentiates Trad-X from other SEFs, suggests the spokesman.

Buy-side firms can access the platform directly or via a bank's agency platform.  Since Trad-X is a cleared platform, the buy-side needs credit pushed to Trad-X by a bank FCM before they can trade, says the spokesman.

Trad-X is also launching a new CCP (central counterparty clearing) service for Euro-denominated interest-rate swaps between CME's Clearing House and LCH.Clearnet Ltd. in January of 2015.   The switch service was previously only available in USD and enables traders to switch corresponding positions between CME and LCH, which provides the market with a margin efficient execution level collateral management tools, the company says.

"The addition of CCP auctions for euro interest rate swaps marks the latest innovative enhancement to the Trad-X platform. We will be rolling out a number of new products to the platform during the course of 2015," Marcus adds.

Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio

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