+

Cookies on the Business Insider India website

Business Insider India has updated its Privacy and Cookie policy. We use cookies to ensure that we give you the better experience on our website. If you continue without changing your settings, we\'ll assume that you are happy to receive all cookies on the Business Insider India website. However, you can change your cookie setting at any time by clicking on our Cookie Policy at any time. You can also see our Privacy Policy.

Close
HomeQuizzoneWhatsappShare Flash Reads
 

One of the bond market's biggest concerns got an airing on primetime TV last night

Sep 29, 2015, 19:34 IST

Liquidnet

Advertisement

The bond market's dirty laundry got an airing on primetime television television last night.

Traders are struggling to deal with low liquidity, which means its hard for them to fill large buy or sell orders. That is because of post-crisis regulations that have forced banks to cut back on the amount of bonds they hold to trade, and an incredible increase in the number of bonds in existence.

Everyone from JPMorgan chief Jamie Dimon to Blackstone billionaire Steve Schwarzman to bond guru Bill Gross has sounded the alarm about the lack of liquidity in the bond market.

Liquidnet is the latest in a handful of trading companies that think technology will solve this, and it took to Monday's game between the Green Bay Packers and Kansas City Chiefs to run an ad to promote it's solution: a fixed income dark pool.

A dark pool is a trading platform where buyers and sellers can place orders without being seen. The idea is to let people trade without affecting prices, and its only when a trade is matched up that it is reported.

Liquidnet, which says it has 120 money managers already signed up for its dark pool, and others say these platforms can fix the problem of reduced liquidity.

These dark pools aggregate orders from multiple buyers and sellers, pooling liquidity in one place. The bond market at present in contrast is heavily reliant on traders calling other traders to get clarity on pricing and demand.

"The fixed income market has been woefully underserved by technology and, as concerns about a liquidity crunch continue to rise, it needs a transformation," said Seth Merrin, founder and CEO of Liquidnet.

Advertisement

The ad, which can be seen here, had previously aired on daytime TV.

"We knew the traders would be watching, and you can see from the ad, we are having a bit of fun with it," Marisha Mistry from Liquidnet told Business Insider.

It starts with a green screen reading: 'The following EPIC PROMOTIONAL AD has been approved INSTITUTIONAL TRADERS by Liquidnet, the global institutional trading network."

The ad then runs with the text: 'BOND LIQUIDITY IS DRYING UP ... WITH $20 TRILLION ON THE LINE TENSIONS ARE HIGH ... BUT THAT'S ALL ABOUT TO CHANGE.'

Here are some screenshots from the ad:

Advertisement
You are subscribed to notifications!
Looks like you've blocked notifications!
Next Article