Corporate bond investors are being converted to new trading technology in greater numbers, but they are still struggling to move paper in size at a time when central bank buying is making a structural liquidity drought more acute. There are several strands to their shifting behaviour, all stemming from increasing use of electronic as opposed to voice trading: algorithmic trading of smaller positions is beginning to be utilised; and e-trading is even opening the door to trading protocols that side-step investment bank dealers and encourage investors to make markets. "The interesting thing we are seeing now through e-trading is buyside firms becoming price-makers," said Russell Dinnage, lead consultant at GreySpark Partners. "They are being asked by banks to make a price for a bond, rather than the other way round."
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