H2O.ai Case Studies H2O.ai Empowers MarketAxess to Innovate in Capital Markets

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	H2O.ai Empowers MarketAxess to Innovate in Capital Markets H2O.ai

H2O.ai Empowers MarketAxess to Innovate in Capital Markets

H2O.ai

Technology Category	Analytics & Modeling - Predictive Analytics Analytics & Modeling - Real Time Analytics
Applicable Industries	Finance & Insurance
Applicable Functions	Sales & Marketing
Use Cases	Predictive Quality Analytics Real-Time Location System (RTLS)
Services	Data Science Services
Challenge	The lack of liquidity in bond markets has traditionally made predicting bond prices challenging. In order to provide higher transparency and find the most consistent and accurate prices to help traders become more confident as price makers, MarketAxess relied on machine learning to develop Composite+, a proprietary algorithmic pricing engine for corporate bonds that leverages a range of proprietary and industry data sources, with updates up to every 15 seconds. Read More
About Customer	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. MarketAxess’ Composite+, powered by H2O open source, 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. MarketAxess is transforming itself to become an AI company in capital markets with H2O.ai. Read More
Solution	Powered by H2O-3, Composite+ applies artificial intelligence (AI) and machine learning to predict accurate two-way reference prices for more than 24,000 bonds globally. When the most proximate signals are missing, the Composite+ algorithm can still learn to triangulate less predictive features successively. Composite+ is designed to support a variety of trading functions such as pre-trade price discovery, liquidity provision, transaction cost analysis, auto-execution, and crossing. The pricing engine is seamlessly incorporated into all aspects of MarketAxess’ trading workflow, including within its all-to-all Open Trading™ marketplace and request for quote (RFQ) inquiry screens. It is also integrated into the company’s BondTicker® and Axess All® web-based data platforms. Read More Log in to view content
Contents

Technology Category

Analytics & Modeling - Predictive Analytics

Analytics & Modeling - Real Time Analytics

Applicable Industries

Finance & Insurance

Applicable Functions

Sales & Marketing

Use Cases

Predictive Quality Analytics

Real-Time Location System (RTLS)

Services

Data Science Services

Challenge

The lack of liquidity in bond markets has traditionally made predicting bond prices challenging. In order to provide higher transparency and find the most consistent and accurate prices to help traders become more confident as price makers, MarketAxess relied on machine learning to develop Composite+, a proprietary algorithmic pricing engine for corporate bonds that leverages a range of proprietary and industry data sources, with updates up to every 15 seconds.

About Customer

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. MarketAxess’ Composite+, powered by H2O open source, 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. MarketAxess is transforming itself to become an AI company in capital markets with H2O.ai.

Solution

Powered by H2O-3, Composite+ applies artificial intelligence (AI) and machine learning to predict accurate two-way reference prices for more than 24,000 bonds globally. When the most proximate signals are missing, the Composite+ algorithm can still learn to triangulate less predictive features successively. Composite+ is designed to support a variety of trading functions such as pre-trade price discovery, liquidity provision, transaction cost analysis, auto-execution, and crossing. The pricing engine is seamlessly incorporated into all aspects of MarketAxess’ trading workflow, including within its all-to-all Open Trading™ marketplace and request for quote (RFQ) inquiry screens. It is also integrated into the company’s BondTicker® and Axess All® web-based data platforms.

Impact #1	H2O-3 empowered Composite+ to transform low-quality data points into high-quality market data to drive automation and efficiency.
Impact #2	The solution that the MarketAxess team has developed over the years offers key benefits to their business.
Impact #3	At Scale: MarketAxess is able to reprice and track over 24,000 bonds globally.

Impact #1

H2O-3 empowered Composite+ to transform low-quality data points into high-quality market data to drive automation and efficiency.

Impact #2

The solution that the MarketAxess team has developed over the years offers key benefits to their business.

Impact #3

At Scale: MarketAxess is able to reprice and track over 24,000 bonds globally.

Benefit #1	Composite+ increased the accuracy of pricing accuracy prediction and reduced model scoring errors on average by $.66 per bond.

Benefit #1

Composite+ increased the accuracy of pricing accuracy prediction and reduced model scoring errors on average by $.66 per bond.

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Overview

H2O.ai Empowers MarketAxess to Innovate in Capital Markets

Operational Impact

Quantitative Benefit