Starting from June 10, 2020, the trading hours of the X-Bond anonymous click business will be extended. The trading hours of T+0 will be extended to 16:50, and the trading hours of T+1 will be extended to 17:00.
In order to further meet market demand, improve market transaction efficiency, and improve bond market liquidity, the China Foreign Exchange Trading Center (referred to as the "Trading Center") launched the anonymous click service of spot bonds (referred to as "X-Bond") in September 2016.
Since X-Bond was launched, it has been operating well and its market share has increased from less than 0.1% to 10%.
In 2017, the Exchange organized multiple special trainings for asset management institutions, market-making institutions and other active institutions to provide an in-depth introduction to X-Bond’s innovative mechanisms and system functions from multiple dimensions such as business, system operations and practical exercises.
Currently, a total of 1,410 institutions have opened X-Bond business permissions. The types of institutions include commercial banks, trust companies, financial companies, securities companies, fund companies, insurance companies and unincorporated products issued by the above institutions.
1. X-Bond operation situation Since 2017, X-Bond quotation volume and transaction volume have increased significantly, with the market share reaching a maximum of 16%.
The optimal bid-ask spread of active bonds narrowed significantly, from 5bp at the beginning of the year to 0.25bp at the end of the year, with the minimum being 0.01bp.
The trading volume of active coupons accounts for 25% of X-Bond, and the number of transactions accounts for 40%. The positioning of X-Bond’s active coupon matching has become increasingly prominent.
2. Characteristics of X-Bond trading mechanism Since active institutions have the characteristics of large number of transactions and fast transaction speed, compared with transaction methods such as inquiry and quotation request, X-Bond can more efficiently satisfy the needs of active institutions.
Active coupon trading.
3. Reasons for the rapid rise of X-Bond (1) Continuous inclusion of new institutions, especially buy-side institutions such as funds and insurance, increasing the number of counterparties to choose from. Since the launch of X-Bond, the number of participating institutions has increased from the initial 252 to 1,410.
Among them, unincorporated products account for more than 80%.
In addition to the participation of institutions with strong trading attributes such as banks and securities companies, the trading activity of institutions with strong investment attributes such as funds and insurance has also gradually increased. The inclusion of buyer institutions can better improve the liquidity and price discovery functions of the market.
(2) Intelligently generate a list of active bonds, narrow the scope of tradable bonds, and continuously optimize system performance. Currently, the stock of bonds on the market reaches 24,000. Due to the large number, it puts a certain burden on the system.
Therefore, through in-depth study of bond concentration, liquidity and other indicators, an active bond list is intelligently generated on X-Bond, reducing the login time from two minutes to five seconds, greatly improving system performance.
(3) Personalized selection of functions such as one-click freezing, OCO orders, and batch import into Excel to increase user dependence. X-Bond provides a variety of personalized setting functions based on traders' operating habits to enhance trading charm and user stickiness.
(4) WeChat and QQ groups push quotations, market-oriented training, select X-Bond stars and other diversified means for market promotion. On the basis of continuously optimizing the X-Bond system, the trading center pushes quotations and holds special events through WeChat and QQ groups.
Promote market members to deepen their understanding of X-Bond through training and expanding quotation display channels.
In particular, the "X-Bond Weekly Stars" from 17 institutions share usage experiences on the CfetsOnline official account every week, allowing traders to have a more comprehensive understanding of X-Bond functions and usage methods.
4. The future development direction of X-Bond will be consistent and successful.
In the context of the new era, the 2017 Central Economic Work Conference regarded promoting high-quality development as the fundamental requirement for determining development ideas, formulating economic policies, and implementing macro-control at present and in the future. How to promote the high-quality development of X-Bond has also become a topic under the trading center
The focus of one step of work.
With the continuous optimization and upgrading of the X-Bond system and the increasing number of participating institutions, X-Bond transactions with "anonymous quotation + automatic matching + click transaction" are opening a new chapter in the trading method of my country's spot bond market and further improving the bond Market liquidity and market transaction efficiency.
In the next step, the trading center will continue to optimize the X-Bond system and launch new functions such as pre-listing bond trading, iceberg orders, trading opportunity push, and interfaces to improve the efficiency and convenience of active bond quotations.