Bond trading software provider AxeTrading has teamed up with fixed-income analytics specialist Overbond to add its COBI pricing analytics to the AxeTrader execution management system (EMS). The arrangement reflects growing demand for analytics to support pricing evidence as regulations like MiFID II sharpen the focus on best execution within the fixed-income arena.
The integration allows AxeTrader users that also have permissions for Overbond’s COBI analytics, to get immediate access to information about a security with a click from within AxeTrader. The AxeTrader platform provides fixed-income traders with market aggregation and trading workflows in a single desktop. AxeTrader is connected to over 45 execution venues and 11 market data sources.
COBI Pricing is Overbond’s most advanced AI bond pricing solution for electronic bond trading. It utilizes deep data aggregation and AI modelling trained on five years live markets data and 20 years of back-data history. The Overbond COBI Pricing capability can be activated by AxeTrader users themselves or upon request to AxeTrading.
According to Vuk Magdelinic, CEO of Overbond, “There’s still a lot of data problems in aggregating and getting a true sense of what is traded and then learning from that history efficiently. As you can imagine, there’s very voluminous data sets out there. And on some bonds, there’s nothing. So, it’s gappy on one end and voluminous on the other. So that’s the problem number one.”
Magdelinic says a lot of counterparties have already recognized that a modelled approach – that takes all that relevant data, models it and then provide an optimized output – can address this issue. “So even with the trend of more consolidated change being introduced and more data sharing, we need an analytics layer – a modelling layer that can take all that in, make sense of it, and tell us [that] this is the price, that this is the best executable price we can get … in that situation.”
The AxeTrading partnership is one of a series Overbond plans to establish in the coming year. Overbond is “really focused on establishing partnerships with large tier one sell sides and buy sides, and also sourcing more data into the engine,” says Magdelinic. “We don’t source data on our own account; we do that on behalf of clients. So, if a client is purchasing data licenses, we are going to be an analytics and aggregation layer that sits on top of those licenses. We’re basically executing on this roadmap of more deployment, more data aggregation and more end clients.”