Following the successful launch of the first electronic platform for trading index-based credit derivatives in London, Creditex has announced the expansion of the platform for the North American marketplace.
Creditex, a leading provider of execution, liquidity and information services in the credit derivatives market, began piloting the electronic platform for trading credit derivatives indices with dealers in New York earlier this month. Due to overwhelming demand and strong support from the dealer community, the system is being made available in North America.
"The trading experience with the London-based dealers vastly exceeded our initial expectations both in terms of technology adoption as well as liquidity," said Sunil Hirani, Creditex’s CEO. "The rapid adoption of the system in London led us to accelerate the introduction of electronic trading in North America. Since we began piloting the electronic platform with US-based dealers earlier this month, 19 counterparties have traded indices worth almost $3 billion in notional."
The trading platform supports the trading of all credit default swap (CDS) indices including the iBoxx and TRAC-X suites. Key benefits include ease of execution, an 80% reduction in the explicit cost of trading while providing critical operational and settlement efficiencies.
The electronic system provides complete price and trade transparency as well as risk management benefits. The trading platform, which runs on Creditex’s award-winning RealTime technology, allows traders to easily post live, actionable orders online. In addition, Creditex clients can receive end-of-day electronic feeds of their trade confirmations, thus eliminating some of the risks associated with the trade reconciliation process. This is consistent with ISDA’s 2003 Operations Benchmarking Survey which establishes goals for reducing risks and errors associated with trading OTC derivatives. Creditex worked very closely with traders at several dealer institutions to develop the trading protocol and user interface for the trading platform.