Tradeweb Reports December 2023 Total Trading Volume of $28.9 Trillion and Average Daily Volume of $1.46 Trillion
Tradeweb Markets Inc. (Nasdaq: TW) reported a 43.3% YoY increase in total trading volume for December 2023, with an ADV of $1.46tn. For Q4 2023, the total trading volume was $104.4tn, with an ADV of $1.68tn, up 56.9% YoY. The full year 2023 ADV was up 27.6% YoY.
The substantial year-over-year (YoY) increases in average daily volume (ADV) reported by Tradeweb Markets Inc. suggest a significant uptick in trading activity across various financial instruments. The growth in ADV for U.S. government bonds, European government bonds and swaps/swaptions ≥ 1-year indicates heightened market volatility and increased investor engagement with fixed income products, possibly as a response to macroeconomic factors such as interest rate changes and geopolitical tensions.
Furthermore, the record share of fully electronic U.S. High Grade TRACE and the rise in equity convertibles/swaps/options trading underscore a broader trend towards electronic trading platforms, which offer greater efficiency and transparency. The uptick in global repurchase agreements (repos) reflects changing dynamics in the money markets, potentially influenced by central bank policies and shifts in short-term funding needs.
The data presented by Tradeweb may signal robustness in the fixed income and derivatives markets, which could have implications for market liquidity and the broader financial ecosystem. Investors and market participants might interpret these trends as indicators of the market's temperature, influencing their strategies and risk management decisions.
Tradeweb's reported increases in ADV and total trading volume are indicative of strong performance and could have positive implications for the company's financial health. The reported preliminary average variable fees per million dollars of volume traded provide insight into the company's revenue generation capabilities. With higher trading volumes, even a slight increase in fee revenue can translate into a substantial top-line growth.
This performance, particularly the record-breaking figures in several categories, may reflect positively on Tradeweb's stock valuation as it demonstrates the company's ability to capitalize on market conditions and attract trading volume. Investors may view these results as a testament to the company's competitive positioning within the electronic trading space and its potential for future revenue growth.
It's also worth noting the reported increase in compression activity, which, despite carrying a lower fee per million, indicates a focus on risk management and operational efficiency among market participants. This could suggest a maturing market environment where participants are looking for more than just execution capabilities from their trading platforms.
The data reported by Tradeweb Markets Inc. reflects broader economic trends, such as the impact of historic interest rate moves on fixed income trading. The significant YoY increase in trading volumes for U.S. government bonds and the rise in rates derivatives trading volumes are likely correlated with market reactions to monetary policy adjustments and inflation expectations.
The rise in electronic trading volumes, particularly in the context of U.S. High Grade and European credit markets, may be indicative of an ongoing shift in market structure and participants' preferences towards more transparent and efficient trading mechanisms. This trend could have long-term implications for market efficiency and the allocation of capital within the economy.
Moreover, the increased activity in the money markets, specifically in repurchase agreements, may signal shifts in liquidity preferences and the search for yield amidst the current interest rate environment. These shifts have the potential to influence the Federal Reserve's monetary policy tools and the overall stability of short-term funding markets.
01/04/2024 - 07:33 AM
Month of December 2023 ADV up 43.3% YoY
Fourth Quarter 2023 ADV up 56.9% YoY
Full Year 2023 ADV up 27.6% YoY
NEW YORK --(BUSINESS WIRE)--
Tradeweb Markets Inc. (Nasdaq: TW), a leading, global operator of electronic marketplaces for rates, credit, equities and money markets, today reported total trading volume for the month of December 2023 of $28.9 trillion (tn). Average daily volume (ADV) for the month was $1 .46tn, an increase of 43.3 percent (%) year-over-year (YoY). For the fourth quarter of 2023, total trading volume was $104 .4tn and ADV was $1 .68tn, an increase of 56.9% YoY, with preliminary average variable fees per million dollars of volume traded of $2.54 .1
Billy Hult, Tradeweb CEO, said: “Historic interest rate moves, geopolitical uncertainty and ongoing market volatility helped drive a 2023 resurgence in fixed income. Despite a challenging start to the year, we reported a 27.6% YoY increase in average daily volume for the full year and broke numerous volume records across rates, credit, equities and money markets. The fourth quarter was particularly strong in rates, and in December we reported a record 18.2% share of fully electronic U.S. High Grade TRACE for the month.”
Record Highlights (See table below for the full breakdown of volumes)
The month of December 2023 Tradeweb records included:
Share of fully electronic U.S. High Grade TRACE
ADV in U.S. ETFs
ADV in equity convertibles/swaps/options
Fourth quarter 2023 Tradeweb records included:
ADV in U.S. government bonds
ADV in swaps/swaptions ≥ 1-year
Share of and ADV in fully electronic U.S. High Grade TRACE
ADV in equity convertibles/swaps/options
ADV in global repurchase agreements
Full year 2023 Tradeweb records included:
ADV in U.S. government bonds
ADV in European government bonds
ADV in swaps/swaptions ≥ 1-year
Share of and ADV in fully electronic U.S. High Grade and U.S. High Yield TRACE
ADV in European credit
ADV in Chinese bonds
ADV in U.S. ETFs
ADV in equity convertibles/swaps/options
ADV in global repurchase agreements
The month of December 2023 Highlights
RATES
U.S. government bond ADV was up 39.8% YoY to $159.5 billion (bn). European government bond ADV was up 21.5% YoY to $33.4b n .
U.S. government bond volumes were supported by growth across all client sectors, increased adoption across a diverse set of trading protocols on the institutional platform and sustained rates market volatility. Higher interest rates continued to drive trading in the retail market. European government bond volumes were supported by sustained rates market volatility and strong hedge fund activity.
Mortgage ADV was up 34.1% YoY to $175.1b n .
To-Be-Announced (TBA) platform volumes were supported by the broader rates market rally as well as strong coupon swap and roll trading activity. Robust client engagement in specified pool trading reflected growing adoption of our list trading tool YoY.
Swaps/swaptions ≥ 1-year ADV was up 80.1% YoY to $336.5b n and total rates derivatives ADV was up 62.0% YoY to $513.2b n .
Strong volume in swaps/swaptions ≥ 1-year was driven by increased activity in longer-duration swaps as well as an 85% YoY increase in compression activity, which carries a lower fee per million. 4Q23 compression activity was higher than 3Q23. Growing volumes in the request-for-market (RFM) protocol and inflation swaps contributed to strong activity for the month.
CREDIT
Fully electronic U.S. credit ADV was up 56.4% YoY to $5.6b n and European credit ADV was up 26.2% YoY to $1.6b n .
Strong U.S. credit volumes were driven by increased client adoption of Tradeweb protocols, most notably in request-for-quote (RFQ), portfolio trading and Tradeweb AllTrade. Tradeweb captured a record 18.2% share of fully electronic U.S. High Grade TRACE, and 6.5% share of fully electronic U.S. High Yield TRACE. European credit volumes were supported by strong activity in portfolio trading and Tradeweb Automated Intelligent Execution (AiEX), as well as increased client adoption of our smart dealer selection tools and Tradeweb AllTrade protocols. Overall, global portfolio trading ADV was up 87% YoY.
Municipal bonds ADV was down 5.3% YoY to $414 million (mm).
While outpacing the -14% drop in the broader market2 , municipal trading volume slowed marginally, as retail investors digested lower yields and institutional tax-loss harvesting activity waned.
Credit derivatives ADV was down 4.9% YoY to $7.5b n .
Tight credit spreads and low market volatility led to slightly lower overall swap execution facility (SEF) market activity.
EQUITIES
U.S. ETF ADV was up 44.3% YoY to $10.9b n and European ETF ADV was up 29.1% YoY to $3.2b n .
Institutional platform volumes in both U.S. and Europe were strong, with U.S. volumes up 12.8% YoY.
MONEY MARKETS
Repurchase agreement ADV was up 34.2% YoY to $508.7b n .
Increased client adoption of Tradeweb’s electronic trading solutions drove global repo activity. Quantitative tightening, heightened collateral supply and current rates market activity shifted demand from the Federal Reserve’s reverse repo facility to money markets. Retail money markets activity continued to be strong as interest rates remained elevated.
YoY Volume for the Month of December 2023, Q4 2023 and Full Year (FY) 2023
December 2023
Q4 2023
FY 2023
Asset
Class
Product
ADV
(USD mm)
YoY
ADV
(USD mm)
YoY
ADV
(USD mm)
YoY
Rates
Cash
375,734
35.83%
397,987
25.08%
366,586
6.95%
U.S. Government Bonds
159,512
39.84%
162,335
28.65%
145,996
9.93%
European Government Bonds
33,447
21.55%
40,491
21.58%
40,250
14.21%
Mortgages
175,080
34.09%
185,883
20.82%
173,449
2.20%
Other Government Bonds
7,694
72.31%
9,278
90.92%
6,892
38.32%
Derivatives
513,233
62.04%
689,759
121.78%
529,757
54.92%
Swaps/Swaptions ≥ 1Y
336,467
80.12%
462,960
129.46%
336,928
61.17%
Swaps/Swaptions < 1Y
173,761
35.39%
223,305
107.54%
190,628
45.33%
Futures
3,004
89.72%
3,494
110.94%
2,201
27.41%
Total
888,967
49.82%
1,087,746
72.88%
896,343
30.91%
Credit
Cash
12,500
52.84%
14,292
41.22%
12,376
22.61%
U.S. High Grade - Fully Electronic
5,059
63.51%
5,133
41.26%
4,362
31.55%
U.S. High Grade - Electronically Processed
2,236
5.82%
2,500
-3.67%
2,666
1.03%
U.S. High Yield - Fully Electronic
514
9.45%
642
10.48%
623
1.08%
U.S. High Yield - Electronically Processed
231
22.98%
300
4.42%
302
-13.89%
European Credit
1,637
26.17%
2,044
28.48%
1,979
15.73%
Municipal Bonds
414
-5.26%
455
-0.84%
352
-3.18%
Chinese Bonds
2,189
320.08%
2,984
245.75%
1,944
96.41%
Other Credit Bonds
220
274.22%
234
111.49%
148
36.19%
Derivatives
7,524
-4.94%
9,864
-13.80%
14,030
-20.36%
Swaps
7,524
-4.94%
9,864
-13.80%
14,030
-20.36%
Total
20,024
24.42%
24,155
12.02%
26,407
-4.71%
Equities
Cash
14,071
40.55%
11,054
15.20%
10,233
-0.32%
U.S. ETFs
10,918
44.25%
8,308
13.58%
7,731
3.68%
Europe ETFs
3,153
29.09%
2,746
20.38%
2,502
-10.94%
Derivatives
16,805
119.46%
12,481
63.43%
10,110
34.45%
Convertibles/Swaps/Options
10,853
160.86%
8,503
94.28%
6,799
76.24%
Futures
5,951
70.21%
3,979
22.03%
3,310
-9.61%
Total
30,875
74.75%
23,535
36.57%
20,343
14.38%
Money Markets
Cash
524,836
32.83%
541,403
35.05%
497,546
24.63%
Repurchase Agreements (Repo)
508,734
34.22%
524,267
36.86%
480,384
26.07%
Other Money Markets
16,102
0.05%
17,136
-3.81%
17,163
-5.46%
Total
524,836
32.83%
541,403
35.05%
497,546
24.63%
ADV
(USD mm)
YoY
ADV
(USD mm)
YoY
ADV
(USD mm)
YoY
Total
1,464,703
43.28%
1,676,839
56.9%
1,440,639
27.56%
*Bolded numbers indicate a record for the Tradeweb platform
Please refer to the report posted to https://www.tradeweb.com/newsroom/monthly-activity-reports/ for complete information and data related to our historical monthly, quarterly and yearly ADV and total trading volume across asset classes.
About Tradeweb Markets
Tradeweb Markets Inc. (Nasdaq: TW) is a leading, global operator of electronic marketplaces for rates, credit, equities and money markets. Founded in 1996, Tradeweb provides access to markets, data and analytics, electronic trading, straight-through-processing and reporting for more than 40 products to clients in the institutional, wholesale and retail markets. Advanced technologies developed by Tradeweb enhance price discovery, order execution and trade workflows while allowing for greater scale and helping to reduce risks in client trading operations. Tradeweb serves more than 2,500 clients in more than 65 countries. On average, Tradeweb facilitated more than $1.4 trillion in notional value traded per day over the past four quarters. For more information, please go to www.tradeweb.com .
Basis of Presentation
All reported amounts are presented in U.S. dollars, unless otherwise indicated. In determining the reported U.S. dollar amounts for non-U.S. dollar denominated securities, the non-U.S. dollar amount for a particular month is translated into U.S. dollars based on the monthly average foreign exchange rate for the prior month. Please see the footnotes on page 3 of the full report for information regarding how we calculate market share amounts presented in this release.
Market and Industry Data
This press release and the complete report include estimates regarding market and industry data that we prepared based on our management’s knowledge and experience in the markets in which we operate, together with information obtained from various sources, including publicly available information, industry reports and publications, surveys, our clients, trade and business organizations and other contacts in the markets in which we operate. In presenting this information, we have made certain assumptions that we believe to be reasonable based on such data and other similar sources and on our knowledge of, and our experience to date in, the markets in which we operate. While such information is believed to be reliable for the purposes used herein, no representations are made as to the accuracy or completeness thereof and we take no responsibility for such information.
Forward-Looking Statements
This release contains forward-looking statements within the meaning of the federal securities laws. Statements related to, among other things, our outlook and future performance, the industry and markets in which we operate, our expectations, beliefs, plans, strategies, objectives, prospects and assumptions and future events are forward-looking statements.
We have based these forward-looking statements on our current expectations, assumptions, estimates and projections. While we believe these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. These and other important factors, including those discussed under the heading “Risk Factors” in documents of Tradeweb Markets Inc. on file with or furnished to the SEC, may cause our actual results, performance or achievements to differ materially from those expressed or implied by these forward-looking statements. In particular, preliminary average variable fees per million dollars of volume traded are subject to the completion of management’s final review and our other financial closing procedures and therefore are subject to change. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements contained in this release are not guarantees of future performance and our actual results of operations, financial condition or liquidity, and the development of the industry and markets in which we operate, may differ materially from the forward-looking statements contained in this release. In addition, even if our results of operations, financial condition or liquidity, and events in the industry and markets in which we operate, are consistent with the forward-looking statements contained in this release, they may not be predictive of results or developments in future periods.
Any forward-looking statement that we make in this release speaks only as of the date of such statement. Except as required by law, we do not undertake any obligation to update or revise, or to publicly announce any update or revision to, any of the forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this release.
1 See pg. 7 of the report available at https://www.tradeweb.com/newsroom/monthly-activity-reports/ for the detailed breakdown of average variable fees per million dollars of volume traded for each underlying asset class.
2 Based on data from MSRB
View source version on businesswire.com: https://www.businesswire.com/news/home/20240104878412/en/
Media contact:
Daniel Noonan, Tradeweb
+1 646 767 4677
Daniel.Noonan@Tradeweb.com
Investor contacts:
Ashley Serrao, Tradeweb
+1 646 430 6027
Ashley.Serrao@Tradeweb.com
Sameer Murukutla, Tradeweb
+1 646 767 4864
Sameer.Murukutla@Tradeweb.com
Source: Tradeweb Markets Inc.
What is the trading volume increase for December 2023 for Tradeweb Markets Inc. (Nasdaq: TW)?
The trading volume for December 2023 increased by 43.3% YoY for Tradeweb Markets Inc. (Nasdaq: TW).
What was the average daily volume (ADV) for December 2023 for Tradeweb Markets Inc. (Nasdaq: TW)?
The ADV for December 2023 was $1.46tn for Tradeweb Markets Inc. (Nasdaq: TW).
What was the total trading volume for Q4 2023 for Tradeweb Markets Inc. (Nasdaq: TW)?
The total trading volume for Q4 2023 was $104.4tn for Tradeweb Markets Inc. (Nasdaq: TW).
What was the average daily volume (ADV) for Q4 2023 for Tradeweb Markets Inc. (Nasdaq: TW)?
The ADV for Q4 2023 was $1.68tn for Tradeweb Markets Inc. (Nasdaq: TW).
What was the full year 2023 ADV for Tradeweb Markets Inc. (Nasdaq: TW)?
The full year 2023 ADV was up 27.6% YoY for Tradeweb Markets Inc. (Nasdaq: TW).