Bonds.com and predictive pricing and analytics firm 7 Chord have partnered to combine bonds.com’s executable pre-trade pricing data with BondDroid AI, 7 Chord’s real-time dynamic pricing and analytics engine.
7 Chord will also act as a redistributor of bonds.com’s Level 3 raw data and the Level 1+ order book analytics data created in collaboration between the two firms.
Bonds.com CEO David Parker told THE DESK that the data the partnership provides is “far superior” compared to publicly available data which only refers to the TRACE consolidated trade tape, which shows all trades in the market. “The problem with relying on TRACE is that only a minority of bonds (15%) trade in a given day, and those trades are intermittent. The bonds.com and 7-Chord data covers more than 20,000 bonds and the data is updated once per minute based on new bids and offers, or an updated implied level based on exact market conditions in that minute,” Parker said.
This order book analytics for bonds includes information such as book depth, order imbalance trends and signals, as well as top-of-the-book prices enriched with OAS, yield, and risk sensitivities. The partnership is anticipated to improve both firms’ ability to digest this data. Parker said that while the raw data feed from BondsPro can be anywhere from 30-100 million price updates per day, which can be a big burden to receive and process, the 7 Chord AI technology both reduces the net amount of data a client needs to take in, and incorporates additional market signals and analysis to deliver an “enhanced” level of price information, significantly reducing time to insight for market participants.
Additionally, 7 Chord CEO Kristina Fan told THE DESK that BondDroid has consumed raw bonds.com Level 3 data since the firms originally partnered in 2019. “This allowed 7 Chord to compile more than four years of very granular pricing data and experiment with various features that significantly improved the predictive quality of the BondDroid AI Price in various market conditions. We decided to make these signals available to others since the same insights can be useful not just for pricing but in many other workflows across the trade life cycle, such as estimating market impact, perfecting one’s trading strategy, identifying real-time trends, and transaction cost analysis,” Fan said.
Parker added that using the firm’s raw data provides a 10x minimum increase in prices vs. the public data, “not even accounting for the more timely nature of our constantly updating prices vs. the intermittent trade data”. He said, “On any given day, only about 15-20% of bonds (2,500 issues) will trade at all and therefore have an updated public (TRACE) data point. Our data covers those bonds on a more frequent basis, while also providing real-time prices for an additional 20,000 bonds daily.”
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