Overbond, the fixed income data, analytics and trade automation solutions provider, has announced the integration of axe data from Neptune Networks Ltd., the pre-trade market utility for fixed income assets. This strategic move aims to build upon the capabilities of Overbond’s analytics and trade automation tools for mutual buy-side clients. With the integration, Overbond will broaden the range of securities its analytics and trading algorithms can cover, by integrating Neptune’s data into each client’s distinct environment upon request.
Overbond AI will now utilise axe data supplied by Neptune, tailored to each individual client, to refine its size-adjusted pricing. This enhancement will be integrated into its analytics and trade automation suite, which already includes multiple price aggressiveness levels, distinct bid/ask liquidity scoring, and confidence scoring for each security.
“Previously, in order to receive axes via Neptune, clients would either have to view them via dashboard or write to a very voluminous, real-time API,” Vuk Magdelinic, Overbond’s CEO, tells TradingTech Insight. “Now, all their dealer quote axes are fully integrated from Neptune into Overbond single tenant analytic, so they can discover the best executable route in the price and size desired.”
The collaboration is particularly significant for the buy-side segment of the fixed income market, where the dissemination of axes by sell-side desks is crucial for indicating interest in buying or selling specific securities. Buy-side entities leverage this information to execute substantial trades, fine-tune order allocation, and identify liquidity for securities with lower liquidity profiles.
“It’s important to stress that the integration is buy side client-specific,” says Magdelinic. “Each dealer is streaming on Neptune to specific clients, so it’s a one-to-one relationship between the dealer and the client. But through Overbond, clients can see that data alongside other quotes, and route executions accordingly.”
To address the complexities and time constraints of trade allocation and execution, Overbond has developed a proprietary smart order routing (SOR) algorithm, which identifies the most advantageous execution route under prevailing market conditions by considering historical data and current dealer axes tailored to the client’s needs. The inclusion of live axe data from Neptune is anticipated to refine the SOR algorithm’s precision, thereby streamlining the trading process for individual buy-side traders.
Byron Cooper-Fogarty, COO of Neptune, commented: “Neptune has always responded to buy-side demand for connectivity to core workflow and analytical tools. The integration with Overbond is the latest step in that process.”
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