Hybrid Demand Continues to Dominate Fixed Income

Nearly 75 percent of overall fixed-income trading will be done electronically by 2011, up from the estimated 65 percent electronic adoption rate seen today, according to John Jay, senior analysts for Aite Group, who authored a recent report on the subject. However, due to the nature of some fixed-income trades, human interaction will still be necessary to discuss at least a portion of an order, Jay explains. "You can only take technology so far," he says. "A decent portion [of trading] will include a hybrid approach ... at least for the next couple of years." In addition, single-dealer platforms and their overall distribution impact will decline due to the current market conditions. Buyers searching for vanilla debt securities and structures will turn to inter- and multi-dealer platforms, according to the report.