January 11th, 2022

The Bond Market & AI: How MarketAxess Brings it All Together

RSS icon RSS Category: Customer, Financial Services

The vast majority of the equities market trades electronically while the bond market is still in its infancy by comparison, but MarketAxess is seeking to change that.

Recently, we hosted a virtual event with the MarketAxess team where they explained how they were solving challenges in the world’s largest bond marketplace while leveraging AI and the cloud. See below some of the key takeaways of the session (you can also check out the recording of the panel here).

What does MarketAxess do?

MarketAxess is the operator of a leading electronic trading platform for fixed-income securities and the provider of market data and post-trade services for the global fixed-income markets.

Julien Alexandre, Co-Head of Research at MarketAxess, explains how they electronified the trading process.  

”MarketAxess came about 20 years ago, and it electronified the [trading] process. You can submit a request for a quote instead of calling many people at different times. Now, you just send a request electronically, get prices back, and have access to bigger leverage by doing that because more people can provide you with more quotes in a lesser amount of time.”

Julien explains the comparison of the bond market vs the stock market.

How has MarketAxess worked with H2O.ai?

Over the past five years, H2O.ai has partnered with MarketAxess in building their Composite+ product. 

Composite+ is powered by H2O open source is a platform that delivers greater insight and price discovery in real-time, globally, for over 24,000 corporate bonds. Composite+ has won several awards for its use of AI, including the Risk Markets Technology Award for Electronic Trading Support Product of the Year and the Waters Technology American Financial Technology Award for Best Artificial Intelligence Technology Initiative. 

Julien further describes the two reasons why Composite+ was successful.

Reason #1 – Partnership with H2O

“The first one is the ability that we had to model the problem the right way. And that’s where H2O was very helpful to us when we engaged five years ago with your expertise and versatility in dealing with machine learning programs across many different sectors and many different applications. So being able to properly set the model and work on feature building and feature creation and was instrumental to the success of Composite+.”

Reason #2 – Unique Data

Julien continues, “The second reason is the unique data that MarketAxess has through its trading platform and really it’s a virtuous circle where we get liquidity on the platform and we’re able to use the information we have access to from the platform and repackage it into Composite+ into a precise pricing algorithm that then makes its way back into the platform by helping with data and the new protocols and new ways of trading that, have been built over the last few years.”

What was MarketAxess’ journey to the cloud?

Liz Brand, Global Cloud Engineering Manager, speaks to their journey into the cloud and how innovation was the true driving force on adopting the cloud at MarketAxess. She started the conversation with a few reflective questions. 

“When we looked at the cloud, we asked ourselves, how can we create environments that are focused on innovation? How can we do that dynamically and support our entire company? How would this allow people to experiment with new technologies and work with integrating them into our applications at a larger scale?”

Further, she delves into the key things that were important to their team when evaluating the cloud:

  1. Cost – the ability to scale their workloads without running 24×7 and saving money.
  2. Velocity – speed to market.
  3. Customer obsession – obtaining feedback and acting on it quickly. 

The event continued with multiple questions coming from the global audience (26 counties in attendance to be exact). One of them sparked the team’s interest in working at MarketAxess. 

What’s the day-to-day like working at MarketAxess?

The MarketAxess team has a beautiful office in Hudson Yards occupying three floors of 55 Hudson Yards (which hopefully I’ll get to visit at some point), as well as offices all around the world. There’s a focus on collaboration in their office locations, with an open floor plan and many different spaces, both formal and informal, for employees to gather. Creativity is at the core of what inspires MarketAxess employees to do their best work, and their NYC office space is no exception: they’ve commissioned a number of artists to produce murals and other works of art throughout. There is also a cafeteria where employees can pick up their company-provided lunch or snacks and eat together while enjoying views of the Hudson River.

Artwork by John “Crash” Matos welcomes you as you enter the MarketAxess office, as do the Hudson River views.

Throughout the 3 MarketAxess floors, you’ll find a variety of collaboration spaces.

Liz explained the close-knit, collaborative team when she came into the office, “I think the greatest benefit of having desks and being around each other is you would overhear conversations. We’re not a massive company. People know each other really well.”

While physically being in the office provides unique benefits and MarketAxess has designed an employee-centric environment, the pandemic has given MarketAxess the opportunity to entirely rethink its approach to hybrid working. They now offer a high degree of flexibility to their tech employees, as far as choosing the work environment that best suits them – something their people greatly value.

Want to learn more about MarketAxess? Check out the recording of the virtual event here.

Special shoutout and thank you to Kyle White, David Krein, Julien Alexandre, Liz Brand, Rakesh Malpani, Li-Kang Chen, Bari Polay, and the MarketAxess team! The H2O team is grateful for our continued partnership.

Lastly, both of our teams are hiring!

Check out the careers page for MarketAxess and H2O.ai.

About the Author

Ian Gomez

Ian Gomez joins H2O.ai as Head of Customer Programs. Ian was Head of Marketing at Grid.ai where he jump-started the company’s growth by building awareness, community, and demand. He led the company out of stealth with a new product, website, and branding while growing the open-source PyTorch Lightning community, which surpassed 2.5 million downloads before his departure. As a previous maker, Ian was Director of Integrated Marketing at H2O. During his 4 years, he led 5 H2O World’s (Mountain View, SF, 2x NYC, LON), grew the global meetup community to 90+ groups and over 180,000 members while leading the global field marketing team. He also worked with various customers highlighting them at H2O World, industry events, webinars, and meetups. Ian previously held enterprise sales and marketing roles at DataTorrent, HP Enterprise, and Gucci. As an avid proponent of diversity and inclusion, Ian serves on the National Board for FASTER (Filipinos in STEAM) as interim-CFO and Treasurer. Ian is also a mentor in the Iluminate AI mentorship program.

Leave a Reply

What Are Feature Stores and Why Are They Important?

Machine learning (ML) models are only as good as the data fed into them. In

January 18, 2022 - by Adam Murphy
A Beginner’s View of H2O MLOps

Note: this is a community blog post by Shamil Dilshan Prematunga. It was first published

January 15, 2022 - by Jo-Fai Chow
Shapley Values – A Gentle Introduction

If you can't explain it to a six-year-old, you don't understand it yourself. - Albert

January 11, 2022 - by Adam Murphy
H2O Release 3.36 (Zorn)

There’s a new major release of H2O, and it’s packed with new features and fixes! Among

January 7, 2022 - by Michal Kurka
1st Place Winner’s Blog – Kaggle 2021 Data Science and Machine Learning Survey

Kaggle, the largest global community of data scientists, conducted the 5th annual industry-wide survey that

January 4, 2022 - by Shivam Bansal and KunHao Yeh
Why Companies Need to Think About MLOps

For years machine learning (ML) researchers have focused on building outstanding models and figuring out

December 14, 2021 - by Adam Murphy

Start your 14-day free trial today