High-speed traders are dominating the US Treasury market.
High frequency traders have moved in on the US Treasury bond market in a big way.
Risk.net just published a confidential list of the top 10 firms ranked by volume traded on BrokerTec, an ICAP-owned trading platform for US Treasuries which is believed to make up 65% to 70% of interdealer market volumes.
The data is for May and June.
The top three firms alone — Jump Trading, Citadel, and Teza Technologies — accounted for about $US4.2 trillion in volume, according to the report.
In all, eight of the top ten firms trading on the platform were non-banks, including KCG, Spire-X, XR Trading, DRW and Rigel Cove, according to the report.
The report said: “The BrokerTec client list sheds new light on the extent to which trading activity in the interdealer Treasury market is concentrated with a handful of non-bank firms.”
The fresh data on the involvement of high-frequency trading in the Treasury market follows the official report on the October 15 2014 flash crash in the Treasury market. That report highlighted the growth in ‘high-speed electronic trading’ and the growing involvement of principal trading firms in the Treasury markets.
Risk noted that interdealer broker ICAP disputes the data, claiming that the volume of trading is overstated.
The full article can be read here. A subscription is required, but there is a free trial available.
Here are the top 10 firms:
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