The Telematico Basis Trading Facility allows for the electronic trading of the
gross basis.
A spread trading facility is available on the EuroMTS,
which allows government securities to be traded against
other government and non-government securitites.
The functionality allows users to trade the yield differential
between the bid and ask prices of two securities, one of
which is a reference government bond. The trade will result
in the simultaneous execution of the two cash bonds and
the price of each leg is derived from the yield spread and
the price of the government reference bond at the time of
the trade.
The product has been developed in particular for
eurobond markets (corporate, agencies) where trading
spreads accounts for a greater share of activity
compared to outright cash trading. Competitively,
MTS is extremely well positioned to provide such
a trading feature to its participants given the
large liquidity pool of government bonds, in turn
ensuring a high degree of efficiency when trading
eurobond spreads.
The Spread System is delivered via integrated
front-ends provided by Independent Sofware Vendors
(ISVs) under a program sponsored by MTS designed
to facilitate connectivity for MTS participants. |
