Q-WIXX, an electronic platform for trading large portfolios of single-name credit default swaps, says it has officially launched its automated service for the global market with broad supp
Q-WIXX, an electronic platform for trading large portfolios of single-name credit default swaps, says it has officially launched its automated service for the global market with broad support from major participants.
The organisation says major credit derivative dealers and liquidity providers including BNP Paribas, Deutsche Bank, Goldman Sachs, HSBC, JP Morgan, Merrill Lynch, and UBS have already have joined the platform, signalling strong market interest and a rapid rate of adoption, and four additional dealers are in the process of joining the platform.
Q-WIXX has been established to assist dealers, correlation desks, proprietary trading desks, hedge funds and other buy-side market participants in achieving improved pricing and processing efficiencies when executing transactions known as Offers Wanted in Competition or Bids Wanted in Competition. These transactions are lists regularly containing more than 100 credit derivative names and notional amounts of more than USD1bn or EUR1bn per list.
Distributed to participating bidders via a network used actively by more than 1,000 CDS traders at the top 20 major dealers in the US and Europe, Q-WIXX allows for competitive pricing by major dealers and also provides clients with live prices, making it easier to execute trades while reducing communication and execution time. The platform’s backers say trades that typically took hours can be done in minutes through Q-WIXX, with reduced market risk for both the buy-side and sell-side and significantly increased assurance of execution.
Through its connection to T-Zero, the market leader in post-trade connectivity, the Q-WIXX platform provides significant post-trade benefits. Post-trade processing of lists is particularly cumbersome because the bulk nature of list trading currently results in very high levels of operational activity, which can increase the potential for error and backlogs in trade booking.
‘When executing large portfolios of credit derivatives, the existing process of booking transactions is manually intensive, prone to errors and delays, and is unscalable,’ says Pierre Mathieu, head of European flow credit trading at BNP Paribas. ‘Q-WIXX provides the technology infrastructure to deliver electronically straight-through processing of credit derivatives.’
Alex Bernand, global head of credit correlation at Deutsche Bank, says: ‘At its inception, Q-WIXX is being supported by a very significant and broad group of dealers. This is a reflection of both the need for a standardised market solution and the very high quality of the product.’
Says Oliver Carter, director of European flow credit trading at HSBC: ‘While active banks, hedge funds, correlation and prop trading desks and buy side accounts have individually and separately developed automation to execute large portfolios of credit derivatives, Q-WIXX has been created to develop a standardised, scalable and common platform that helps address the needs of the entire market.’
Adds Guy America, head of European credit trading at JPMorgan in London: ‘The amount of time, energy, errors and therefore money that both buy side and sell side could save makes a standardised, scalable and common platform like Q-WIXX a welcome addition to the market.’
Q-WIXX was incubated and developed by Creditex Group, a holding company for several leading financial services and technology firms, and has been spun-off into a separate, independently managed entity. Q-WIXX completed the first-ever electronic execution of a portfolio of credit derivatives in November 2006, when a leading asset manager executed a global portfolio of credits in excess of USD1.7bn in conjunction with major global credit derivatives dealers in less than 15 minutes.
