Despite the liquidity crunch, electronic trading of fixed-income securities has held up, relatively, in recent months say traders. Excluding March, which was highly volatile, volumes have been strong this year. This is the continuation of a long trend – e-trading has made huge strides in recent years. In the US, 57% of fixed-income trading is now electronic, according to a report from Celent, a research and advisory firm for financial institutions. That figure is the result of a compound annual growth rate of 17% since 2003, and is expected to reach 62% by 2010. The development of e-trading has advanced the most in the more liquid, standardized products, namely government bonds. Eighty percent of US treasuries are now traded electronically, and that’s predicted to reach 84% by 2010.
In the inter-dealer market, where global revenues reached $7 billion in 2007, e-trading is expected to account for 35% of revenues by...
