Creditex launches electronic trading of CDS indexes

Credit derivatives broker Creditex has launched electronic trading of credit default swaps (CDS) indexes.

The company said its system will reduce the costs associated with trading CDS indexes, such as the iBoxx and Trac-x suites, and will help to increase liquidity in the market. The technology allows the placing of electronic orders. It also supplies intra-day and end-of-day electronic feeds of live prices and trade confirmations.

“The electronic execution of credit index products is essential for the evolution of the CDS market,” said Sunil Hirani, Creditex’s New York-based chief executive.

Creditex said it worked closely with dealers at several banks to develop the trading protocol and user interface for the trading platform. It then piloted the program with several banks in London before launch.

“We are pleased with the early results of the pilot program, both in terms of the usability of the technology and the significant liquidity support that has been building on the platform,” said Mazy Dar, head of product management at Creditex. “We anticipate that liquidity will continue to build quickly over the coming weeks as the platform is rolled out to additional clients in Europe and North America.”

Six transactions took place on the Creditex platform yesterday with notionals valued at €135 million.

The Trac-x suite of CDS indexes were launched jointly last April by JP Morgan Chase and Morgan Stanley. It is now administered by Dow Jones Indexes. The iBoxx suite was launched by a consortium of 11 banks, which included Citigroup and Deutsche Bank, last October.