Question: In the Fixed Income market, what all participants you can consider as a buy side ?
Answer: Following are the considered as Buy Side Participants in the Fixed Income market - Asset managers - Central banks - Pension funds - Insurance companies - Banks - Hedge funds - Proprietary trading desks
Question: Which are the participants, you can consider as a Sell side in Fixed Income Market?
Answer: This include following participants - Regional Banks - Global Banks - Commercial Banks
Question: What is RFQ (Request for Quote) Trading Protocol in Fixed Income Market?
Answer: The RFQ trading protocol establishes discrete auctions for each instrument that a participant wishes to buy or sell. Which enables the seller or purchaser of an instrument to simultaneously request competitive, executable bids or offers from multiple dealers, at the choice of the participant. Participant sets the time when he/she would like all of the dealers' prices or spreads returned to the participant, in order to have the ability to see all executable prices available at the same time. The entire process is managed electronically is highly efficient and can be completed in minutes.
Question: Can you give some steps followed for Trading Lifecycle on Multi-Dealer platform?
Answer: Below are the lifecycle steps for the Fixed Income trading platform - Pre-trade: Participants/Client sends a trade Inquiry. He need to provide detail like o Spread over some Benchmark like UST o Requesting for Bid/Offer/Swap o Type: Outright/Cross o Pricing o Timer like 2 mins, 5 mins etc. - Participants send request RFQ (Request for Quote) to the dealers of the choice. Selecting pool of dealers. - Dealer Responses returned and investor can choose best deal or level. - Trade executed electronically (usually) for best price fit. - Post Trade: Cashflow calculations: some system support cashflow calculation in the same system. - Post trade: Trade detail reported both the counterparties. - Post Trade: STP (Straight Through Processing): Trade details directly flow into your blotter or trading system. - Post Trade: Executed Trade appears on the TRACE for compliance.