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Tradeweb Advances Electronification of Swaptions Market via New Protocol

via Business Wire

Tradeweb Markets Inc. (Nasdaq: TW), a leading, global operator of electronic marketplaces for rates, credit, equities and money markets, today announced it has completed the first-ever fully electronic request-for-market (RFM) swaption package trade. Citadel and Barclays were counterparties on the trade, which was executed recently on the Tradeweb Swap Execution Facility (TW SEF).

The execution of this trade marks an industry-first, enabling institutional clients on TW SEF to request and receive a two-way market, rather than a price based on one direction, for a series of swaptions and swaps in a single electronic quote. This is especially beneficial for participants in derivatives markets, as it enhances transparency while simultaneously protecting client intent, and shares potentially sensitive or strategically valuable trading information exclusively between counterparties.

Troy Dixon, Managing Director, Co-Head of Global Markets at Tradeweb, said: “This trade signals the expansion of Tradeweb’s electronic trading capabilities into a previously untapped area of the rates market. As a global leader in the electronic trading of interest rate derivatives, this is a significant step forward in the evolution of bilateral derivatives trading and the broader electronification of the swaption and broader derivatives markets.”

Sabri El Jailani, Global Head of Rates Options Trading at Barclays, said: “Barclays is pleased to participate in the first RFM swaption package trade, a milestone in the electronification of the rates options market. This trade reflects the growing momentum behind electronification in the global swaption market. Barclays is proud to be part of the evolution towards bringing greater transparency and automation to our clients across regions.”

John Niccolai, Chief Operating Officer for Global Fixed Income at Citadel, said: “Electronically trading swaptions is an important first step in the evolution of electronically trading OTC rates Options, which will increase transparency, improve execution workflow, reduce counterparty risk and strengthen liquidity, making this an easier product to access and trade. We are pleased to be using the service and look forward to engaging with Tradeweb and other market participants to drive its broad adoption.”

A swaption gives participants the option to enter into an interest rate swap in the future at a pre-determined rate. An important segment of the interest rate derivatives landscape, swaptions offer traders the ability to take nuanced views on future interest rate movements as well as market volatility. Electronic protocols like RFM have proven significant value in the interest rate swap landscape, especially during times of market volatility. RFM allows clients to maintain control of trading intent while benefiting from transparency, customization and flexibility.

Tradeweb is a leading global interest rate swap (IRS) trading platform and was the first dealer-to-client platform to introduce the RFM protocol to the IRS market. Since 2005, Tradeweb has been bringing greater transparency and efficiency across fixed income markets – helping participants reduce risk, access competitive pricing and benefit from more competitive, data-driven trading. Over time, Tradeweb has continued to expand its derivatives offering; announcing a series of “firsts” for the market, including but not limited to: first fully electronic SOFR swaption trade; first fully electronic swap compression trade; first fully electronic two-way market swap; first fully electronic swaption trade; first fully electronic cleared inflation swap; first fully electronic multi-asset package trade; first fully electronic cross-currency swap; first fully electronic European invoice spread trade; and first fully electronic SOFR swap spread trade. Since the completion of this market first, 20 dealers are now providing RFM swaption package pricing on TW SEF.

About Tradeweb Markets

Tradeweb Markets Inc. (Nasdaq: TW) is a leading, global operator of electronic marketplaces for rates, credit, equities and money markets. Founded in 1996, Tradeweb provides access to markets, data and analytics, electronic trading, straight-through-processing and reporting for more than 50 products to clients in the institutional, wholesale, retail and corporates markets. Advanced technologies developed by Tradeweb enhance price discovery, order execution and trade workflows while allowing for greater scale and helping to reduce risks in client trading operations. Tradeweb serves more than 3,000 clients in more than 85 countries. On average, Tradeweb facilitated more than $2.4 trillion in notional value traded per day over the past four fiscal quarters. For more information, please go to www.tradeweb.com.

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