Tradeweb Loses 2-Month Volume Growth, Relapses to $21.3trn in October

Tradeweb Markets, a NASDAQ-listed operator of electronic marketplaces for rates, credit, equities and money markets, saw a reversal in its two-month growth in October 2022. The operator’s total trading volume for October came in at $21.3 trillion, which is a -15% decline month-over-month (MoM) from the $25.1 trillion posted in September.

Earlier in July, Tradeweb’s total monthly volume dropped -16% from $26.1 trillion in June to $22 trillion. However, the volume rose 6% to $23.4 trillion in August and improved further by 7.3% in September before relapsing below its July performance.

Furthermore, the operator’s average daily volume (ADV) in October 2022 slumped -by 12% MoM and -16.5% year-over-year (YoY) to $1.05 trillion. The ADV reached $1.20 trillion in September.

In contrast, Tradweb recently reported an 8.2% increase in its revenue for the third quarter of 2022. The numbers came in at $287.1 million. The electronic marketplaces operator also said it saw a record ADV during the quarter.

Market Breakdown

Finance Magnates’ analysis of the figures shared by Tradeweb shows that Tradeweb experienced mixed growth across all its markets.

In the rates market, the US government bond ADV dropped -0.9% MoM to $128.1 billion and sank further by -14% YoY. The same thing happened to the European government bond which came in at $37.8 billion in October, representing a -9% MoM slump but a 4.2% YoY growth.

“U.S. government bond activity was lower YoY, as industry volumes declined. While U.S. government bond activity in institutional markets was modestly lower, we saw a record in average daily trades, up 61.2% YoY,” Tradeweb explained.

Unlike the rates market, the credit market recorded some growth. The fully electronic US credit’s ADV improved 5% MoM and 15.2% YoY to $4.4 billion in October. However, the ADV of the European credit remained flat, returning $1.7 billion in October just like it did in September. On a year-over-year basis, nonetheless, this represents -an 8.6% drop in the daily average. Also in the rates market, municipal bonds in the credit market posted an impressive 20% MoM and 147% YoY growth in their daily average volumes. In contrast, Tradeweb’s credit derivates ADV collapsed -57%MoM to $15.9 billion but improved 39.3% YoY.

In the equities market, Tradweb’s exchange-traded funds (ETFs) posted a marginal 1.3% MoM ADV growth but got a better 55.4% YoY boost in daily average. This is as the US EFT ADV came in at $7.7 billion in October. In contrast, the operator’s European ETF ADV declined -12.5% MoM and -6.8% YoY to $2.1 billion, which is down from $2.4 billion in September.

In the money market, the ADV of repurchase agreements (repos) traded on Tradeweb decreased -2.1% MoM to $373.3 billion, which is down from $381.2 billion in September. However, on a YoY basis the repo ADV jumped 13.6%.

“Continued client adoption of Tradeweb’s electronic trading solutions drove Global Repo activity, despite significant volatility in money markets and sustained elevated usage of the Federal Reserve’s reverse repo facility. Retail money markets activity reached a record high as rates continued to rise," Tradeweb explained.