Creditflux-
Credit derivatives broker launches aggressor-only
service. Interdealer brokerage set for fee-cutting.
The stage is set for another round of fee
cutting among interdealer brokers in the
credit derivatives market, after the launch
this week of a new aggressor-only service
in North America. Aggressor-only brokerage
involves charging only the party that initiates
the trade a fee, and not the one that posts
the initial price.
Hybrid voice and electronic broker IDX
Capital, which opened shop on Tuesday (6
December), says it is offering aggressor-only
brokerage to 10 dealers in the single name
default swap market. The firm says it expects
to sign up more dealers to the service,
and that it is already establishing a desk
for credit derivative index trading. It
is planning to open desks in London and
Aggressor-only fee charging is not new
to the credit derivatives market. There
is reported to have been some dabbling in
this area among other firms that base their
service around electronic trading. However,
IDX Capital is the first firm to embrace
aggressor-only fees fully.
The firm's hybrid platform is called IDX
Live. It shows real-time firm pricing and
trades can be executed purely electronically,
but the platform is backed by a traditional
voice brokerage service.
The introduction of an aggressor-only model
is unlikely to go unchallenged. Creditex
is widely regarded as having the leading
interdealer electronic trading platform,
although other brokers such as CreditTrade
and GFI also operate screens.
IDX's single name credit derivatives desk
is staffed by 10 brokers and support staff.
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