Exchanges and Clearing Houses

Capture OTC Liquidity

OTC trading volumes are very large, often exceeding exchange volumes. Pressure to clear OTC business on exchanges/clearing houses means liquidity is on the move, and competition for it is fierce. Baymarkets EDGE helps you funnel that OTC business into your organisation.

EDGE: Familiar, but Better

IDBs negotiate deals between traders and trade them bilaterally OTC or cross them on-exchange. EDGE Marketplace enhances this process by making it partially or wholly electronic. Your clients will start using EDGE quickly because it is designed to build on their existing ways of doing business.

Higher Revenues

Clearing Revenues: By offering brokers and traders your own-branded EDGE Marketplace you encourage them to clear OTC trades through you, boosting clearing revenues. The more liquid your marketplace, the more participants will use it, and the more trades will be cleared through you and not the competition.

Trading Volumes: If you are an exchange, brokers and traders can use your EDGE Marketplace to negotiate on-exchange block trades. The more negotiation your marketplace captures, the more block trades your exchange receives.

More Players: Offering OTC clearing allows smaller counterparties to participate, boosting volumes.

Value Added Services: The more successful your marketplace, the more value-added services you can sell to the brokers and traders in it.

New Products: It can be difficult launching new products on a central order book. By using an OTC platform like EDGE you can build liquidity until the product has sufficient volumes to also be listed on the central order book.

Options and complex products: The more complex the product, the less likely it is to be traded on the central order book. By offering an OTC platform to your clients you give them tools to trade and clear all your products.

Efficiency

EDGE creates efficiencies for both front-end and STP back-end, speeding up processing and reducing costs for your organisation and your customers.

Case Studies

The Norwegian Stock Exchange, uses EDGE to drive OTC equity derivatives trading onto its clearing house.

Cleartrade is launching using EDGE Credit Manager for commodity derivatives.

MTFs and New Marketplaces

As well as driving liquidity onto existing exchanges and clearing houses, EDGE may also be used to create new marketplaces such as MTFs or ATSs. Cleartrade MTF will be an EDGE-powered commodities MTF.

 

EDGE Benefits >