Swapstream, the only independent multilateral electronic trading platform for medium and long term interest rate swaps (IRS), announced today that a significant increase in its liquidity commitments will bring its quote size to €800M on bid and offer whilst offering the most competitive and tightest bid/offer spreads in the electronic IRS industry.
This improved liquidity further confirms the ongoing market shift towards e-trading of IRS. This shift is now widely recognised, for example by the International Swaps & Derivatives Association (ISDA), who have set in place measures to encourage the full trade automation of the major OTC derivatives product classes by 2005.
"This exciting rise in liquidity reflects increasing demand and interest in Swapstream and electronic trading by traders," said Andre Keijsers, director of Swapstream. "For Swapstream, already market leader in terms of functionality, the increased liquidity represents the next stage in our evolution to be the leading multilateral platform to trade interest rate swaps. As IRS trading follows the success of FX, equity and bonds platforms, Swapstream's market makers have increased liquidity to ensure our trading community will have access to the most competitive spreads."
Swapstream's market makers have now combined to form the largest electronically multilateral available liquidity pool in EUR IRS, providing continuous prices in straight swaps and swap spreads from 1 to 50 years. The company's status as an independent service provider allows it to act as a facilitator without ever competing with banks or brokers.
Marc Campbell, European Head of Interest Rate Swaps at Commerzbank Securities, said, "When developing our IRS e-trading strategies, we looked for an advanced solution that would offer significant liquidity and the most competitive spreads in the marketplace. We saw in Swapstream the highest potential of IRS electronic trading: its neutral nature, multi dealer liquidity, and trading functionality demonstrated to us that the resources were in place for the most effective electronic trading. We can now trade through a secure system with increasing liquidity and tight bid-offer spreads with multiple counterparties. By completing the e-cycle from execution to deal capturing, matching and confirmation, and potential clearing we are aiming to reduce our operational risk and cost."