Overbond’s fixed income artificial intelligence (AI) will now offer protocol and system agnostic integration with venues and electronic trading systems used by sell-side and buy-side trading desks thanks to a strategic alliance with electronic trading provider, Rapid Addition.
The collaboration will help fixed income traders around the globe to use the power of Overbond AI which it reports can automate up to 50% of request for quotes (RFQs) for sell-side desks.
Rapid Addition’s specialist knowledge in FIX protocol, counterparty and market-place connectivity via its open application programming interfaces (APIs) and enterprise software platform should allow global fixed income trading desks to integrate AI-driven bond pricing and liquidity scoring analytics into their workflow, in a way that is agnostic of the internal order management system (OMS), e-trading system, direct venue connectivity, cloud or on-premise solution they currently use.
These API connections allow for internal system integration, pre- and post-trade external data vendor ingestion, and liquidity venue connectivity — ultimately creating a streamlined system capable of automating RFQ flow using Overbond’s AI engine.
With the internal system connectivity facilitated through Rapid Addition’s Open API, sell-side bond trading desks can make Overbond’s AI models their own by accessing recorded transaction history to train the model according to the trading style of the desk. By maximising the precision of these models with cross-venue coverage, desks may be able to optimise P&L performance.
“Rapid Addition’s ability to provide interoperability and market connectivity we can now provide sell-side traders with a system that is not just capable of automating RFQ flow in any currency they make markets in, but is fully integrated from front to back,” said Vuk Magdelinic, CEO of Overbond.
Overbond’s COBI-Pricing LIVE is a customisable AI pricing engine designed to assist traders in automating pricing and trading workflows for global investment-grade bonds. It can reportedly generate prices and liquidity scores for more than 100,000 fixed income instruments and build curves for more than 10,000 issuers in various real-time liquidity scenarios. Overbond notes that COBI-Pricing LIVE has refresh rate of less than three seconds. This should give sell-side trading desks the ability to fully automate 30% of their RFQs and execute an additional 20% with trader supervision, according to the firm.
Rapid Addition’s CEO, Mike Powell, said, “We continue to see increased electronification across capital markets, partly driven by changes to regulation and market structure, but also driven by the deployment of new technologies. We are excited by the potential of combining Overbond’s expertise in AI and Machine Learning with the latest iteration of Rapid Addition’s market leading electronic trading middleware, RA Platform 3.0. At a time when firms are looking to improve ROI and competitive differentiation, this new generation of flexible, open technology will help empower the next phase of their business growth.”
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