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  • Writer's pictureJohn Shelburne

Analyzing The MarketAxess High Grade Volume Data

In this article, we will analyze the MarketAxess data set, which tracks the volume of high grade bond trading on its electronic platform.

MarketAxess, a leading electronic trading platform for fixed income securities, provides institutional investors with access to liquidity in the global credit markets. The MarketAxess platform facilitates trading in high grade bonds, which are typically issued by blue-chip companies and carry a lower risk of default than lower-rated bonds.

The data set covers the period from January 2018 to January 2023 and shows a steady increase in high grade bond trading volumes on the MarketAxess platform. In January 2018, the trading volume was $80,256 million, and by January 2023, it had reached $124,458 million, representing an increase of 55% over the period.

The data set also reveals some interesting patterns in the trading volumes. For example, there are some seasonal fluctuations in the trading volumes, with lower volumes in the summer months and higher volumes towards the end of the year. In March 2020, the trading volume spiked to $141,121 million, which was likely due to the COVID-19 pandemic, which caused market volatility and increased demand for safe-haven assets like high grade bonds.

The MarketAxess data also provides valuable insights into the growing popularity of electronic trading for high grade bonds. Institutional investors are increasingly turning to electronic platforms to trade high grade bonds because they offer lower transaction costs, faster execution times, and greater transparency than traditional voice trading. In addition, electronic platforms like MarketAxess allow investors to access a wider range of bond offerings from different issuers and geographies.

However, electronic trading is not without its challenges. One of the main challenges is ensuring that investors receive the best price for their trades. This is especially important for high grade bonds, which are typically traded in large denominations and can have a significant impact on portfolio returns. To address this challenge, electronic trading platforms like MarketAxess have implemented sophisticated algorithms that enable investors to get the best possible price for their trades.

In conclusion, the data provided by MarketAxess gives us a valuable window into the growing popularity of electronic trading for high grade bonds. The data shows a steady increase in trading volumes over the past five years, reflecting the increasing adoption of electronic trading by institutional investors. While electronic trading offers many benefits, it is important to remain vigilant in ensuring that investors receive the best price for their trades.



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