Consistent Pricing Builds Confidence. Fading Destroys It.
A few years ago, while overseeing a large sell-side trading desk, I was struck by the daily choreography of the fixed-income market. The atmosphere was electric with rapid dialogue, decisive risk-taking, and an unwavering commitment to serve clients. Each morning the chat windows filled with two-way indications: “5M × 5M,” “10M × 10M” – designed to keep liquidity circulating and ideas moving.
The most effective traders consistently did two things:
- Honored & stood up to their prices.
- Provided insight that enabled clients to trade with confidence.
Yet one practice always raised concerns: the habit of fading a quote without clear justification.
Stocks move by just 0.1%, a bond moves three ticks, I had two sellers of that bond today… The excuses were lame and seemingly “endless.”
In isolated cases, that tactic may salvage a few dollars. Over time, however, it erodes trust – what we sometimes called trader’s regret. Inevitably, thirty minutes later a voice on the desk would say:
“Call the client back – let them know we can meet that level.”
At that point the salesperson faces an unenviable choice:
- Make the call, risking questions about why the price suddenly improved.
- Say nothing, hoping the client never discovers how close they were to a better fill.
Either option undermines transparency.
Equity Markets Solved This Problem Long Ago
In equities, firm, executable prices appear on the screen and execute without debate. If a quote is mispriced, the market will correct the error, or trade inefficiently for a period of time – accountability rests with the trader and their precision of execution.
Extending That Discipline to Bonds
At OpenYield, we are committed to bringing the same standard of clarity to the fixed-income market:
- Live, dependable, executable prices – no fading, no second-guessing.
- Fully-firm liquidity across odd-lot and round-lot sizes.
- Modern electronic rails to permit algorithmic and voice desks to transact on equal footing.
In short, we aim to remove the lingering opacity that has historically characterized bond trading.
They say people remain in long term relationships for a year after already knowing it was time to move on. Change is hard, and adapting to what is better for you in the long term, isn’t easy.
If your desk still relies on legacy practices, consider whether the comfort and familiarity of doing things the old way justifies that trader’s regret. Let’s discuss how our firm, transparent fixed-income marketplace can advance your desk’s objectives.