Tradeweb Reports June 2024 Total Trading Volume of $37.5 Trillion and Average Daily Volume of $1.94 Trillion

Rhea-AI Summary

Tradeweb Markets reported significant growth in trading volumes for June 2024, with total trading volume reaching $37.5 trillion and an average daily volume (ADV) of $1.94 trillion, marking a 40.9% increase year-over-year (YoY). For Q2 2024, total trading volume was $121.0 trillion, with an ADV of $1.92 trillion, reflecting a 48.3% YoY increase.

Key highlights include a 50.8% YoY increase in U.S. government bond ADV to $210.7 billion, a 56.0% YoY rise in swaps/swaptions ≥ 1-year ADV to $437.3 billion, and a 92.0% YoY surge in credit derivatives ADV to $14.7 billion. European government bond ADV grew by 17.4% to $50.5 billion.

Tradeweb CEO Billy Hult attributed the growth to increased client engagement and adoption of various trading protocols. Records were set in U.S. high yield and repo, driven by market volatility and sustained primary issuance in Europe and the UK.

Positive

• June 2024 ADV up 40.9% YoY to $1.94 trillion.
• Q2 2024 ADV up 48.3% YoY to $1.92 trillion.
• U.S. government bond ADV increased by 50.8% YoY to $210.7 billion.
• Swaps/swaptions ≥ 1-year ADV up 56.0% YoY to $437.3 billion.
• Credit derivatives ADV rose 92.0% YoY to $14.7 billion.
• European government bond ADV up 17.4% YoY to $50.5 billion.

Negative

• U.S. ETF ADV declined 11.1% YoY to $8.1 billion.

Insights

Financial Analyst

Tradeweb's impressive growth in trading volumes for June and Q2 2024 is noteworthy. The $37.5 trillion total trading volume and $1.94 trillion ADV for June, representing a surge of 40.9% YoY, highlights the platform's increasing adoption and market penetration. Particularly important here is the 48.3% YoY increase in Q2 ADV, showcasing consistent and robust performance across multiple asset classes.

The **breakdown of ADV growth** in various sectors is key here. For instance, the 50.8% rise in U.S. government bonds' ADV indicates a strong demand for secure investments amid volatile market conditions. Additionally, the 41.4% surge in fully electronic U.S. credit ADV suggests increased reliance on digital trading platforms.

**Fee generation** is another critical aspect, where the preliminary average variable fees per million dollars of volume traded at $2.43 might seem small, but given the massive volume, this translates into substantial revenue for Tradeweb. This metric is important for evaluating the profitability and revenue streams of the business, especially considering the scale of trading activity.

In essence, Tradeweb's figures reflect a well-diversified growth strategy and effective client engagement, both of which are good indicators of future stability and potential for continued expansion.

Market Research Analyst

The macroeconomic implications of Tradeweb's trading volume data cannot be understated. The substantial growth in U.S. government bonds and swaps/swaptions trading volumes suggests heightened investor activity in response to global political uncertainties and central bank policy decisions. This aligns with the broader market trends where investors seek to hedge their positions and optimize portfolios in turbulent times.

It's also significant that 69.1% growth in total rates derivatives ADV indicates a shift towards more complex financial instruments, driven by sophisticated market participants like hedge funds. This shift can lead to higher liquidity in these markets, benefiting overall market stability.

In Europe, the increased trading volumes in government bonds and credit derivatives reflect regional economic conditions such as sustained primary issuance and market volatility. The favorable conditions for European government bonds trading, notably gilts, point towards local investors' movements to secure returns in a low-yield environment.

For retail investors, these trends are indicative of a more integrated and responsive trading environment that reacts swiftly to macroeconomic changes, offering opportunities for strategic positioning within various asset classes.

Tech Expert

Tradeweb's latest performance underscores the transformative impact of technology in financial markets. The surge in volumes across various trading protocols, such as request-for-quote (RFQ) and portfolio trading, showcases how enhanced technology platforms are meeting the sophisticated needs of modern traders. The increase in electronic trading, particularly in the U.S. credit and repo markets, highlights the platform's scalability and reliability.

The advancements in automated trading systems and algorithmic trading protocols are driving efficiency and transparency. For example, Tradeweb's AllTrade and SNAP IOI tools are gaining traction, reflecting a broader industry trend towards tech-driven solutions. This not only ensures faster execution of trades but also provides better pricing and liquidity management.

From an investor's perspective, the reliance on cutting-edge technology by Tradeweb suggests a commitment to innovation and continuous improvement, which could lead to sustained competitive advantage and client loyalty in the long run.

June 2024 ADV up 40.9% YoY

Second Quarter 2024 ADV up 48.3% 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 June 2024 of $37.5 trillion (tn)¹. Average daily volume (ADV) for the month was $1.94tn, an increase of 40.9 percent (%) year-over-year (YoY). For the second quarter of 2024, total trading volume was $121.0tn and ADV was $1.92tn, an increase of 48.3% YoY, with preliminary average variable fees per million dollars of volume traded of $2.43.²

Tradeweb CEO Billy Hult said: “Tradeweb in Q2 reported double digit, YoY volume growth in rates, credit, money markets and equities. We set new records for quarterly ADV in U.S. government bonds, fully electronic U.S. high yield and repo, as well as capturing record share of fully electronic U.S. high grade credit. The second quarter of 2024 culminated with a strong June, led by a 54% YoY increase in rates ADV and continued momentum in credit ADV – up 67% YoY. In addition to volatility across many of our markets, Tradeweb volumes in June and throughout Q2 reflected increased adoption in a range of trading protocols and strong client engagement.”

In June 2024, Tradeweb records included:

• ADV in U.S. government bonds

For the second quarter of 2024, Tradeweb records included:

• ADV in U.S. government bonds
• ADV in fully electronic U.S. high yield
• ADV in repurchase agreements (Repo)
• Share of fully electronic U.S. high grade TRACE

June 2024 Highlights

RATES

• U.S. government bond ADV was up 50.8% YoY to $210.7 billion (bn). European government bond ADV was up 17.4% YoY to $50.5bn.
  • U.S. government bond volumes were supported by growth across all client sectors. Increased adoption across a range of protocols and favorable market conditions contributed to the increase in volume. The addition of r8fin continues to contribute positively to wholesale volumes. Market volatility and sustained primary issuance across Europe and the UK helped drive trading volume in European government bonds, especially gilts.
• Mortgage ADV was up 22.9% YoY to $208.9bn.
  • Stronger To-Be-Announced (TBA) volumes were a result of increased activity from the hedge fund community, in addition to heightened basis trading. Client participation on our securitized products platform set a new record and volume executed by mortgage originators also hit a new high.
• Swaps/swaptions ≥ 1-year ADV was up 56.0% YoY to $437.3bn and total rates derivatives ADV was up 69.1% YoY to $782.2bn.
  • Strong volume in swaps/swaptions ≥ 1-year was driven by global political uncertainty and pending central bank policy decisions, as well as a 41% increase in compression activity, which carries a lower fee per million. Client trading activity continued to increase in the request-for-market (RFM) protocol while inflation and emerging markets swap growth remained strong. 2Q24 compression activity was lower than 1Q24.

CREDIT

• Fully electronic U.S. credit ADV was up 41.4% YoY to $7.0bn and European credit ADV was up 24.2% YoY to $2.5bn.
  • U.S. credit volumes were driven by increased client adoption, most notably in request-for-quote (RFQ), portfolio trading and Tradeweb AllTrade®. Tradeweb captured 18.9% share of fully electronic U.S. high grade TRACE, and 8.1% share of fully electronic U.S. high yield TRACE. In Europe, portfolio trading and our unique dealer selection tool (SNAP IOI) saw increased client adoption.
• Municipal bonds ADV was up 30.4% YoY to $410 million (mm).
  • Volume growth outpaced the broader market, as institutional and retail volumes both surpassed 20% growth YoY amidst robust issuance.
• Credit derivatives ADV was up 92.0% YoY to $14.7bn.
  • Increased hedge fund and systematic account activity, along with heightened credit volatility, led to increased swap execution facility (SEF) and multilateral trading facility (MTF) credit default swaps activity.

EQUITIES

• U.S. ETF ADV was down 11.1% YoY to $8.1bn and European ETF ADV was up 18.1% YoY to $2.8bn.
  • ETF market volumes remained muted as market volatility remained low. On Tradeweb, U.S. ETF institutional volumes remained strong, while wholesale market volumes were lower. European ETF volumes grew as clients continued to embrace our automated rules-based trading protocol.

MONEY MARKETS

• Repo ADV was up 20.8% YoY to $599.2bn.
  • Increased client activity on Tradeweb’s electronic repo trading platform drove strong global repo activity. The combination of quantitative tightening, increased collateral supply, and current rates market activity shifted more assets from the Federal Reserve’s reverse repo facility to money markets. Retail money markets activity was strong as markets priced in less aggressive Fed rate cuts.

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 50 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 70 countries. On average, Tradeweb facilitated more than $1.7 trillion in notional value traded per day over the past four fiscal 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. Volumes presented in this release exclude volumes generated by (i) unbilled trial agreements, (ii) products billed on an agreement basis where we do not calculate notional value, and (iii) products that are not rates, credit, equities or money markets products. 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 the 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 events or performance and future events, 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 future events, 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 events, 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 Tradeweb acquired Yieldbroker on August 31, 2023 and r8fin on January 19, 2024. Total volume reported includes volumes from each acquired business subsequent to the date of the applicable acquisition.
² 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240708472629/en/

Media:

Daniel Noonan, Tradeweb

+1 646 767 4677

Daniel.Noonan@Tradeweb.com

Investors:

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.

FAQ

What was Tradeweb's total trading volume for June 2024?

Tradeweb's total trading volume for June 2024 was $37.5 trillion.

How much did Tradeweb's average daily volume (ADV) increase in June 2024?

Tradeweb's average daily volume (ADV) increased by 40.9% YoY in June 2024 to $1.94 trillion.

What was Tradeweb's total trading volume for Q2 2024?

Tradeweb's total trading volume for Q2 2024 was $121.0 trillion.

How much did Tradeweb's average daily volume (ADV) increase in Q2 2024?

Tradeweb's average daily volume (ADV) increased by 48.3% YoY in Q2 2024 to $1.92 trillion.

What was the YoY increase in U.S. government bond ADV for Tradeweb in June 2024?

The YoY increase in U.S. government bond ADV for Tradeweb in June 2024 was 50.8%, reaching $210.7 billion.

How did Tradeweb's swaps/swaptions ≥ 1-year ADV perform in June 2024?

Tradeweb's swaps/swaptions ≥ 1-year ADV increased by 56.0% YoY to $437.3 billion in June 2024.

What was the performance of Tradeweb's credit derivatives ADV in June 2024?

Tradeweb's credit derivatives ADV surged by 92.0% YoY to $14.7 billion in June 2024.

Did Tradeweb's U.S. ETF ADV increase or decrease in June 2024?

Tradeweb's U.S. ETF ADV decreased by 11.1% YoY to $8.1 billion in June 2024.