Muni market traders are changing the way they execute

Published on 17 May 2023

Sometime municipal bonds trade like credit, sometimes like rates, and sometimes like neither; this complexity limits trading as it is tied to manual execution processes. Now that electronic trading platforms are able to scale up that process, traders are finding more effecnet ways to work.

E-trading is fundamental to helping separately managed accounts (SMAs) and exchange traded funds (ETFs) engage in the markets and as these investment vehicles have expanded in the muni bond space, electronic trading has grown to a size where it cannot be ignored.

Daniel Kelly, head of municipal securities at MarketAxess and a former municipal bond dealer, tells us how and why muni traders are changing their behaviour in favour of electronic execution today.