Vega-Chi to Update Trading Interface

European convertible-bond trading multilateral trading facility (MTF) Vega-Chi plans to go live on June 1 with an updated order management interface that will allow traders to better monitor market activity, according to MTF officials.

“The interface lets you view and consolidate your orders, as well as monitor market activity in an alternative way,” explains Constantinos Antoniades, CEO of Vega-Chi.  “We are adding an additional order management screen for clients,” he adds.

Vega-Chi spent the past four weeks testing the new interface, which took 12 weeks to develop, according to officials.

End users can choose to use Vega-Chi’s trading interface or develop their own using the MTF’s application programming interface (API) for Microsoft Excel to send orders to Vega-Chi’s matching engines, which are housed in the Telehouse North and TeleCity Harbor Exchange datacenters in London.

Vega-Chi began trading European bonds in February and has its trades cleared by BNP Paribas. Vega-Chi officials expect to add trading in Asian bonds in the next two weeks, according to officials.

Since trading of convertible bonds is affected by changes in equity prices, credit spreads and other variables, Vega-Chi combines fixed-income and equity volatility, price spreads and risk for interest rates and other variables within the trading system, say officials. The platform also provides a “gray trading” capability, which allows trading once an issue is announced but before the bid price is given. According to Antoniades, there is usually heavy trading on the system within a few minutes of a new issue being announced.

“One of the reasons I started this business is because of the inefficiencies I saw in the convertible bond market,” says Antoniades, pointing to the 15 different dealer-run crossing networks trading convertible bonds. “This is a big opportunity for platforms like Vega-Chi to aggregate liquidity in a way that provides more transparency and better historical data."