By Philippa Aylmer – Over the last year, electronic trading platform, Tradeweb, has further streamlined its workflow process and increased the number of order management systems (OMS) integrated within the Tradeweb ecosystem. The company has also further developed robust electronic audit trails and improved the pre-trade liquidity provider selection process.
As a result, Tradeweb, which works directly with institutional clients to create more transparent, intelligent and efficient ways to trade, has seen significant platform growth both in terms of volume and size of customer base. For the first eight months of the year, average daily volume was USD 768 million; up 57 per cent compared to the same period in 2019.
Winner of the Best ETF platform in the ETF Express US Awards 2020, Tradeweb’s Managing Director and Head of US Equities, Adam Gould says: “Our goals are always to find solutions for clients across all aspects of the trade lifecycle, and ensure they are comfortable putting through all types of ETF trades. When they have feedback, we act quickly to make sure we are addressing all of their needs.”
Specifically, over the last 12-18 months, clients have been talking a lot more about pre-trade transparency and dealer selection, explains Gould. “Essentially it is about getting better pricing by putting multiple liquidity providers in competition. But which liquidity providers should clients include in the RFQ can often be tough to track? We are now providing more data in terms of dealer selection. For example, by providing a given set of parameters such as a 12-month timeline, sector or win rate, the order ticket now displays which liquidity providers have performed best.”
Gould believes that ensuring clients get the best price as quickly as possible, while minimising the manual workflow is key to Tradeweb’s success. “This frees up the trader to do the same thing much faster while also reducing the likelihood of an error.”
He adds that because Tradeweb is more of a hybrid model – there is a team overseeing trades that assists clients and liquidity providers throughout the process – they are able to make sure trades flow seamlessly.
This was particularly the case during the pandemic, says Gould, as it tended to drive people to technology solutions where possible. “With people working from home, it was harder to get quotes from chat rooms, so we made sure that we were around for our clients and reachable 24/7, even if it was to reset passwords.”
Throughout the pandemic, clients were able to get large trades done, explains Gould, and the customer hit rate did not really go down. “We provided a useful tool for clients, especially in March and April when volatility and trading volumes were very high.”
Looking ahead, Gould sees that ETFs will continue to expand in usage across a wide range of money managers, much of it coming from fixed income ETFs. He explains that many fixed income money managers use ETFs as a tool to equitise cash or to increase or decrease their beta exposure.
“Both fixed income asset managers and dealers are part of the Tradeweb ecosystem and familiar with the RFQ protocol. That positions Tradeweb nicely as we have a tremendous presence in the fixed income market.”
Another area of growth over the next 12 months will be ESG ETFs. “They are a good way to get exposure to socially responsible companies and we see a lot more of those ETFs coming over the platform,” adds Gould. n
Head of US Equities, Tradeweb
Adam Gould is a Managing Director and Head of US Equities at Tradeweb, overseeing the Americas institutional Equities electronic trading platform for ETFs, Options and Convertible Bonds, and the Dealerweb Equity Derivatives, dealer-to-dealer platform. He played an integral role in the launch of Tradeweb’s Americas ETF and Options platforms, and leads day-to-day operations. Previously, he served as Senior Vice President of ETF Sales and Business Development at Direxionshares, where he helped launch ETF trading, building and managing client relationships among institutional investors to support the expansion of the business.