Market maker Citadel Securities set to boost credit electronic trading - reports

investmentweek.co.uk:

According to data from Finra, the share of electronic trading in US investment grade credit has increased from 21% in early 2019 to 45% at the end of 2022.

The firm, which serves as an intermediary between buyers and sellers of assets and executes $463bn worth of deals daily, introduced US investment grade bond trading in June, according to a report by the Financial Times. 

Electronic trading, which can play an important role in helping market participants to trade more efficiently and cut costs, has not yet conquered trading in corporate bonds the way it has other asset classes. 

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The high-frequency market making business, which is the largest designated market maker on the New York Stock Exchange, handles about one in four US stock trades.

The move by Citadel Securities highlights the transformation of the analogue corporate debt market, which lags equities by decades in adopting electronic trading. 

Trading of the asset class has mostly been dominated by large banks and telephone transactions, but electronic trading in the credit market has picked up momentum after a surge following the Covid-19 pandemic, theFT reported. 

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According to data from Finra, the share of electronic trading in US investment grade credit has increased from 21% in early 2019 to 45% at the end of 2022, while the proportion of high yield credit traded electronically climbed from 12% to 35% over the same period. 

Bob Cariste, head of fixed-income ETF trading at Citadel Securities, told the FT: «Our initial focus is investment-grade [credit] where we have the highest