Tradeweb Markets Inc. (NASDAQ:TW), a 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.
