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Wall Street's Grip on Bond Trading Means a 1% Gain Takes 3 Years

  • Electronic bond trading creeps forward as banks slowly evolve
  • Tradeweb now showing progress after years of U.S. debt effort
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Photographer: John Taggart/Bloomberg
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Getting Wall Street banks to hang up the phone and embrace electronic trading in corporate bonds has never been easy, but there’s evidence the old guard is finally learning some new tricks.

Tradeweb Markets LLC, a derivative- and bond-trading system owned in part by Goldman Sachs Group Inc. and JPMorgan Chase & Co., has secured a toehold in the $8.6 trillion U.S. corporate bond market. Three years after it first offered corporate bond trading, the firm now handles roughly 1 percent of volume electronically, according to Raymond James & Associates. In a market dominated by giant investment banks, where 80 percent of volume continues to be transacted over the phone or by chat message, that looks like a revolution.