OpenDoor launches anonymous trading venue for OTR U.S. Treasuries

By Pavithra R

OpenDoor Securities has announced the launch of the first ‘all-to-all’ marketplace for on-the-run (“OTR”) U.S. Treasuries.

According to OpenDoor, the anonymous order book will be the first U.S. Treasury venue to offer non discriminatory pricing in benchmarks regardless of an account’s designation. The recent crisis has underscored concerns about information leakage. The launch is in direct response to voiced concerns regarding the negative impact of information arbitrage as well as the shortage of liquidity experienced during times of stress on traditional trading venues.

The ability for institutional investors to source and trade large blocks of OTRs directly and anonymously on the OpenDoor platform aims not only to improve execution quality but is also expected to provide an additional mechanism for market participants to clear risk without market impact.

“We found out in March that the largest debt market in the world does not function well when it is growing and the ability to intermediate its risk is not. OpenDoor is a private-sector solution to a public sector problem. Innovation does not come without disruption and we believe that the expanded OpenDoor platform is a necessary step forward in tackling the structural issues that plague the U.S. Treasury market,” said Susan Estes, CEO, President, and Co-founder of OpenDoor.

OpenDoor is seeing an uptick in volume in its less liquid off-the-run (“OFTR”) issues and anticipates the same in OTRs. Its combined order volume on the platform almost doubled in May and June compared to January and February. The company also stated that its buy-side to buy-side match rate had increased 70% since the launch of its new protocols and continuous order book this year.

OpenDoor’s matching engine is built on the cloud, thereby eliminating any datacenter colocation advantages or disadvantages for speed of execution. The firms consider it mandatory for all participants to adhere to the same set of rules, including a minimum size requirement of $10 mn.

Founded in 2015, OpenDoor is a broker-dealer and FinTech company providing institutional investors tools to improve their execution quality across the U.S. Treasury market, including on-the-run, off-the-run, and TIPS. With over 70 buy-side firms and various dealers trading on the platform, OpenDoor’s expanded offering caters to a variety of trading styles and allows a diversified user group to connect with new counterparties.