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Tradeweb sees second highest volume trading month ever in October

Yahoo Finance’s Brian Sozzi, Myles Udland, and Julie Hyman speak with Tradeweb CEO Lee Olesky about the company’s record breaking October trading activity.

Video Transcript

JULIE HYMAN: I want to bring in Lee Olesky-- he is the CEO of Tradeweb-- to talk about this. Obviously, the markets have been very active, and I know that you all operate both in ETFs and derivatives as well as on the fixed income side. With what you were seeing in October, what was the most active and can you extrapolate anything for the election and what happens next?

LEE OLESKY: Well, yes. So thanks for having me. Today, we-- we actually reported our October trading volumes for the whole month of October, and it was actually our second most active month ever. So we traded about 900 billion, a little over 900 billion per day in our markets in the month of October. That's the second largest one relative to-- the strongest one was actually in March in the middle of the crisis.

So a lot of the surge of activity driven mainly in our instance by the credit markets. We-- we've seen a big surge of volume in credits in the US in particular. We're now doing almost 20% of the entire credit market is coming through our systems. That's investment-grade credit in the US, and we've also seen a number of other trends, right?

So there's been much more debt issuance, obviously, over the last six months in response to the crisis. So governments around the world are issuing tremendous amount of debt, which needs to get distributed, and then ultimately, gets traded. And finally, we see an acceleration really of a long-standing trend, which is just electronification. And more electronic trading, more activity being digitized, which isn't unique to Tradeweb, but in our instance, it's this surge in volume in electronic trading.

BRIAN SOZZI: Lee, one of the themes right now coming off-- come off election day is that we may not get a stimulus plan, and your business has benefited from more stimulus, governments issuing that debt. How do you think the lack of stimulus will-- will impact your business moving forward?

LEE OLESKY: Well, you know, the fortunate thing about the position Tradeweb's in relative to a stimulus plan or even generally, what's happening-- happening in the markets is the activity will continue. There is a core group of institutions that are going to constantly be trading government debt, mortgages, all the different assets, credit. Those sorts of things.

Obviously, more volatility in markets is helpful for a business like Tradeweb, and certainly, you know, what I expect to see in the coming months is a bit more volatility, certainly, than what we've seen over the summer months. So things quieted down July and August. We saw things pick up in September, October-- you know, from September. And I think if we, you know, take a look at the markets over the coming month or so based on what's happening, we're going to see a bit more volatility yet.

BRIAN SOZZI: Lee, if just judging by things-- how they look right now, President, Joe Biden, a Republican-controlled Senate and the House-- still controlled by the Democrats-- how will that change the banking regulatory backdrop?

LEE OLESKY: Well, you know, where-- that's actually not what we focus on a Tradeweb. So you know, we're paying attention to what's happening in regulation relative to the market structure and things that are relevant to the bond market in our industry, but that's the kind of thing that I don't like to sort of get into. It's not my area of expertise, and I think that it's not, you know, not something relevant for us, directly relevant.