Citadel Securities Starts Posting Prices for Credit Gray Market

Citadel Securities has started posting prices for corporate bond trades within minutes of underwriters and companies announcing the pricing for new notes, allowing hedge fund managers and other short-term investors to quickly flip high-grade debt that banks have allocated to them.

The market-making firm has been handling transactions in what is known as the “gray market,” where bonds can be bought and sold before official trading begins, for about a year. This month, Citadel Securities began what it calls its “Grey Trading Panel,” which shows investors the prices where the firm is willing to transact for new-issue deals, according to head of credit trading Sam Berberian. Previously it was facilitating trades based on investors calling the firm directly and seeing if it would buy or sell debt.