LTX has migrated its electronic trading platform for corporate bonds to Amazon Web Services (AWS). The company, a subsidiary of Broadridge Financial Solutions, Inc., said it will use AWS to better optimize its data science processes.
“A key component of the LTX value proposition is our data and AI offering,” said Jim Kwiatkowski, CEO of LTX. “AWS’s tools, including cloud-based services and API connectivity, enable us to build, train and deploy state-of-the-art machine learning (ML) models at scale as well as accelerate and streamline ML lifecycles.”
“By moving its trading platform and critical business applications to AWS, LTX can bring even more intelligence and improved functionality for corporate bond traders,” said Scott Mullins, managing director for worldwide financial services at AWS.
With the advanced cloud-based capabilities that AWS offers, LTX can improve how it processes and analyzes various datasets such as contributed liquidity cloud data, TRACE data, pricing data, and AI generated analytics, said Kwiatkowski.
“These insights help our users identify the most liquid bond, based upon their specific criteria,” he added. “They help buy-side clients select the most appropriate dealer or group of dealers for a specific trade, and they help dealers to determine the most likely of their clients to buy or sell a specific bond.”
Using the AWS platform will help modernize electronic trading of bonds, he said.
“While approximately 40% of the US corporate bond market (investment grade) is now trading electronically, it continues to significantly lag other asset classes that see 80-90% trading electronically. Our mission is to use data to enable customers to more easily discover trading opportunities. We provide transparency and information that our clients need to help them make informed trading decisions and trade more efficiently.
“Enhancing our data sciences processes allows us to continue to improve decision-making and efficiency through the use of our pre-trade liquidity data, dealer and counterparty selection data, and bond selection data.”
LTX is using the AWS SageMaker to reduce time to value across all its ML/AI initiatives. “With a standardized ML approach, consistent way of accessing data, powerful set of tools and a performant operating environment, we can deliver solutions faster to our clients,” Kwiatkowski said. “SageMaker accelerates all ML development steps, from preparing data to training, deploying and monitoring models.”
With SageMaker’s scalable infrastructure, LTX can handle huge amounts of data and processing power to train and serve state-of-the-art AI models at a larger scale.
Broadridge’s 2023 Digital Transformation Survey found that, on average, firms plan to boost their spending on next-gen tech such as AI by more than 20% in the next two years, with a particular focus on cybersecurity.
Kwiatkowski said LTX will use AI to optimize trade participation while reducing information leakage.
“Because the bond market is so opaque, finding natural liquidity is difficult, particularly for larger block trades. We’re using data and AI to facilitate liquidity discovery and assist in counterparty selection.”
LTX uses a neural network, Liquidity Cloud, to alert users to natural contra liquidity, i.e. the other side of their trade.
“On the counterparty selection front, we’ve developed dealer selection analytics which help customers determine the subset of dealers that are most likely to provide natural liquidity directly or through their buy-side clients,” Kwiatkowski said. “And for dealers, our client recommendation engine is used to identify and connect natural buyers and sellers within their entire client network.”
To date, more than 30 dealers and more than 75 asset managers have joined the LTX platform, with over $7 billon in initiated firm orders and an average daily volume of over $25 billion in the Liquidity Cloud in Q1 2023, the company said in its announcement.