VCM Securities LLC, the securities subsidiary of Vyapar Capital Market Partners today began full operation of a revolutionary electronic bond execution platform called Volmax for Odd Lots.
The platform is based on the pioneering Vyapar's Volmax™ electronic trading system originally designed for OTC derivatives.
Unlike existing electronic systems, Volmax for Odd Lots is geared toward bulk executions. Traders may submit their entire books—both positions and prices— and assuming there is counter liquidity, trades are generated for multiple holdings simultaneously through a sophisticated matching algorithm. Prices are held firm, so that traders can be sure that their counterparties will not pull back from posted levels when a trade appears likely. Hedging transactions are executed automatically.
"Our intention from the very beginning in designing Volmax for Odd Lots was to develop a revolutionary not an evolutionary solution," said VCM's CEO, Vinayek Singh. "Up to now, electronic platforms were basically bulletin boards. That's fine for the single trade, but it doesn't solve the liquidity problems that many traders have with numerous line items, stale positions, and odd lot or otherwise largely illiquid holdings. Previously you would have had to put the positions out one at a time and in all likelihood see prices being moved away from where you'd hoped to trade. But now, with a few clicks, you can execute trades in a large number of different bonds at once."
Access to the platform is restricted to trading firms. "The system was designed purely for traders to use, and in response to their feedback for our initial designs," said Mr. Singh. Initial participants include some of the largest dealers on the Street.
VCM's SVP, John J. Lyons III, said, "Our clients have said that from their perspective Volmax is the next generation system. They very much like our easy to understand and use web-based trading system."
Developing the platform was not straightforward. Ashok Mittal, VCM's CIO, observed that "it's easy to come up with an electronic solution to trade one bond at a time. A way to trade odd lot or aged positions in bulk through features that a trader would want, now that's a challenge - it's like portfolio valuation and strategy trading superimposed on a traditional electronic system. Vyapar's TheBEAST™ framework architecture allowed us to make the desired solution robust and available quickly."