Tradeweb ADV Increases 27.6% in 2023


Cleared OTC Equity Trades Rise

Tradeweb Markets Inc., a leading, global operator of electronic marketplaces for rates, credit, equities and money markets, reported total trading volume for the month of December 2023 of $28.9 trillion (tn). Average daily volume (ADV) for the month was $1.46tn, an increase of 43.3 percent (%) year-over-year (YoY). For the fourth quarter of 2023, total trading volume was $104.4tn and ADV was $1.68tn, an increase of 56.9% YoY, with preliminary average variable fees per million dollars of volume traded of $2.54.[1]

Billy Hult, Tradeweb CEO, said: “Historic interest rate moves, geopolitical uncertainty and ongoing market volatility helped drive a 2023 resurgence in fixed income. Despite a challenging start to the year, we reported a 27.6% YoY increase in average daily volume for the full year and broke numerous volume records across rates, credit, equities and money markets. The fourth quarter was particularly strong in rates, and in December we reported a record 18.2% share of fully electronic U.S. High Grade TRACE for the month.”

Record Highlights (See table below for the full breakdown of volumes)

The month of December 2023 Tradeweb records included:

  • Share of fully electronic U.S. High Grade TRACE
  • ADV in U.S. ETFs
  • ADV in equity convertibles/swaps/options

Fourth quarter 2023 Tradeweb records included:

  • ADV in U.S. government bonds
  • ADV in swaps/swaptions ≥ 1-year
  • Share of and ADV in fully electronic U.S. High Grade TRACE
  • ADV in equity convertibles/swaps/options
  • ADV in global repurchase agreements

Full year 2023 Tradeweb records included:

  • ADV in U.S. government bonds
  • ADV in European government bonds
  • ADV in swaps/swaptions ≥ 1-year
  • Share of and ADV in fully electronic U.S. High Grade and U.S. High Yield TRACE
  • ADV in European credit
  • ADV in Chinese bonds
  • ADV in U.S. ETFs
  • ADV in equity convertibles/swaps/options
  • ADV in global repurchase agreements

The month of December 2023 Highlights

Rates

  • U.S. government bond ADV was up 39.8% YoY to $159.5 billion (bn). European government bond ADV was up 21.5% YoY to $33.4bn.
    • U.S. government bond volumes were supported by growth across all client sectors, increased adoption across a diverse set of trading protocols on the institutional platform and sustained rates market volatility. Higher interest rates continued to drive trading in the retail market. European government bond volumes were supported by sustained rates market volatility and strong hedge fund activity.
  • Mortgage ADV was up 34.1% YoY to $175.1bn.
    • To-Be-Announced (TBA) platform volumes were supported by the broader rates market rally as well as strong coupon swap and roll trading activity. Robust client engagement in specified pool trading reflected growing adoption of our list trading tool YoY.
  • Swaps/swaptions ≥ 1-year ADV was up 80.1% YoY to $336.5bn and total rates derivatives ADV was up 62.0% YoY to $513.2bn.
    • Strong volume in swaps/swaptions ≥ 1-year was driven by increased activity in longer-duration swaps as well as an 85% YoY increase in compression activity, which carries a lower fee per million. 4Q23 compression activity was higher than 3Q23. Growing volumes in the request-for-market (RFM) protocol and inflation swaps contributed to strong activity for the month.

Credit

  • Fully electronic U.S. credit ADV was up 56.4% YoY to $5.6bn and European credit ADV was up 26.2% YoY to $1.6bn.
    • Strong U.S. credit volumes were driven by increased client adoption of Tradeweb protocols, most notably in request-for-quote (RFQ), portfolio trading and Tradeweb AllTrade. Tradeweb captured a record 18.2% share of fully electronic U.S. High Grade TRACE, and 6.5% share of fully electronic U.S. High Yield TRACE. European credit volumes were supported by strong activity in portfolio trading and Tradeweb Automated Intelligent Execution (AiEX), as well as increased client adoption of our smart dealer selection tools and Tradeweb AllTrade protocols. Overall, global portfolio trading ADV was up 87% YoY.
  • Municipal bonds ADV was down 5.3% YoY to $414 million (mm).
    • While outpacing the -14% drop in the broader market[2], municipal trading volume slowed marginally, as retail investors digested lower yields and institutional tax-loss harvesting activity waned.
  • Credit derivatives ADV was down 4.9% YoY to $7.5bn.
    • Tight credit spreads and low market volatility led to slightly lower overall swap execution facility (SEF) market activity.

Equities

  • U.S. ETF ADV was up 44.3% YoY to $10.9bn and European ETF ADV was up 29.1% YoY to $3.2bn.
    • Institutional platform volumes in both U.S. and Europe were strong, with U.S. volumes up 12.8% YoY.

Money Markets

  • Repurchase agreement ADV was up 34.2% YoY to $508.7bn.
    • Increased client adoption of Tradeweb’s electronic trading solutions drove global repo activity. Quantitative tightening, heightened collateral supply and current rates market activity shifted demand from the Federal Reserve’s reverse repo facility to money markets. Retail money markets activity continued to be strong as interest rates remained elevated.

 

YoY Volume for the Month of December 2023, Q4 2023 and Full Year (FY) 2023

chart

Please refer to the report posted to https://www.tradeweb.com/newsroom/monthly-activity-reports/ for complete information and data related to our historical monthly, quarterly and yearly ADV and total trading volume across asset classes.

Source: Tradeweb





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