The Modern Bond Market
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Series
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SpeakersAdam Zawadowski (Central European University, Austria)
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FieldFinance, Accounting and Finance
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LocationVrije Universiteit Amsterdam, De Boelelaan 1105, NU-4A67
Amsterdam -
Date and time
May 20, 2026
12:45 - 14:00
Abstract
We identify a widespread trading practice that mitigates fragmentation in the corporate bond market. On modern electronic platforms, traders request quotes for multiple bonds simultaneously and execute against any subset of the quotes. These List requests account for about 80% of all requests on MarketAxess in 2021–2022. Using List-level identifiers, we show that traders substitute across bonds within each List to mitigate quote uncertainty. This uncertainty is decreasing in the bond’s offering size, an inverse proxy for fragmentation. Substitution is stronger among more fragmented bonds and between those with similar maturities and yields. Substitution within Lists reduces the average spread paid by roughly two-thirds relative to accepting all best quotes. Joint paper with Tomy Lee and Chaojun Wang.