Bloomberg has launched a new pre-trade transaction cost analysis (TCA) model to assist fixed-income market participants with trading decisions.
The system calculates potential costs, executable volumes, and the likelihood of execution for sovereign and corporate bonds. The model uses five years of historical transaction data alongside factors such as bond age, currency and the real-time bid-ask spread.
The model builds on Bloomberg’s TCA offerings, which have long catered for equities traders. It provides trusted pre-trade price discovery and an automatic connection to post-trade analysis that ensures a valuable feedback loop for traders.
“Developing a native model in fixed income markets is an exciting step forward to providing bond traders and portfolio managers with greater pre-trade intelligence,” said Ravi Sawhney, Bloomberg global head of trade automation and analytics.
“The inclusion of pre-trade cost and probability estimates as part of the BTCA offering promotes market transparency and helps bond traders to make decisions that comply with their firms’ best execution requirements.
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