MarketAxess (MKTX) Boosts Automated Trading Solutions Suite
MarketAxess Holdings Inc. MKTX recently disclosed that its Adaptive Auto-X solution, introduced in early 2023, has been successfully leveraged to accomplish the first client algorithmic trade across multiple protocols. Its shares declined 0.9% on Jun 23, replicating declines in broader markets.
The multi-protocol automated execution solution is still in the pilot phase. The trading tool has been built with the power of proprietary data and predictive AI-driven analytics of MarketAxess and promises to boost the automation of trading workflows for clients.
In the first phase of the pilot launch, Adaptive Auto-X offered hassle-free automation workflows with the help of which users could establish easy communication with passive liquidity in request for quote ("RFQ"), order book and other matching protocols. On detection of a suitable protocol or utilization of data-driven, smart-order routing, the potential sources of liquidity utilized across diverse trading protocols and liquidity pools of MKTX can be boosted.
The second phase of the pilot will take into consideration factors such as trader motive, urgency or pricing necessities and accordingly, devise additional strategies for buy-side clients to effectively seek liquidity and benefit from higher trading opportunities.
The Adaptive Auto-X solution seems to add further strength to the suite of automated trading solutions suite of MarketAxess. There are multiple benefits associated with such solutions like minimizing trading inefficiencies and human errors, which in turn, enables traders to boost focus on intricate or higher-value trades as well as carry out trades at a faster speed.
Therefore, the launch of an enhanced automated trading tool might fetch more clients for MarketAxess, thereby growing its automated trading volumes. Since its initiation, automated trading has been executed by more than 200 active clients on the MKTX platform, leading to a trading volume in excess of $750 billion. Higher trading volumes are expected to drive the company’s most significant top-line contributor, which is commissions.
Additionally, higher demand for MKTX’s automated trading solutions in light of growing electronic trading amid global credit products prompts the electronic trading platform operator to come up with upgraded versions of automated trading tools. Trading volumes in one of its automated trading protocols, Auto-X RFQ, climbed 39.2% year over year in the first quarter of 2023.
Shares of MarketAxess have declined 3.3% in a year, compared with the industry’s 2.3% fall. Nevertheless, its strong fundamentals are likely to help shares bounce back in the days ahead.
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MKTX currently has a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks in the Finance space are First Citizens BancShares, Inc. FCNCA, Acadia Realty Trust AKR and EastGroup Properties, Inc. EGP. While First Citizens BancShares currently sports a Zacks Rank #1 (Strong Buy), Acadia Realty Trust and EastGroup Properties carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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Shares of First Citizens BancShares and EastGroup Properties have gained 78.1% and 2.5%, respectively, in a year. However, the Acadia Realty Trust stock has lost 18.1% in the same time frame.
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