The 'most volume of trading has been around the rate sector' amid COVID-19 crisis: Tradeweb CEO

In the month of April, electronic trading platform Tradeweb saw a spike in average daily volume to $763.4 billion dollars, which is 14 percent more than April 2019. Tradeweb CEO Lee Olesky joins Yahoo Finance to discuss what how consumer behavior is changing and more.

Video Transcript

ALEXIS CHRISTOFOROUS: TradeWeb has been pretty busy during this pandemic. They saw a spike in average daily volume up nearly 14% year-over-year. Joining us now on the phone is TradeWeb CEO Lee Olesky. Lee, thanks for being with us.

On your trading platform, I'm curious to know which asset classes in particular are proving to be most popular with investors right now.

LEE OLESKY: Well, thanks for having me this morning, Alexis. Yeah, I think most popular and most volume in the last couple of months have been around the rate sector. So for us, that's government bonds, obviously interest rate swaps, things like that. Corporate bonds as well, but much more in the rates space for us.

BRIAN SOZZI: Lee, there are so many people who are working from home right now. Do you think we are getting back to those days-- the days of the day trader are coming back into focus. We're home. A lot of people looking to try to make money.

They see the stock market starting to rise again. Rates are low. The conditions are set up for that.

LEE OLESKY: Well, yeah, for sure. I mean, one of the things that we experienced at TradeWeb is our roughly 1,000 employees over two months ago now went-- went home, and have been operating from home for this extended period of time. But not just our existing employee base, but also the tens of thousands of users that we have around the world that are trading in fixed-income markets-- institutions, wholesale folks, everyone is kind of connected in. And what shocked me is how seamlessly really everything has worked in terms of the remote access.

I think behaviorally, you know, really that's-- the markets have obviously been changing from March, when we had huge, huge volatility and uncertainty. The Fed came in, into April when things started to new normalize, I guess is the best way to put it, a bit more. But we've seen tremendous interaction and activity on the system.

ALEXIS CHRISTOFOROUS: Hey Lee, I know you're plugged in internationally as well. Are you seeing there's more of an appetite for equities in Europe right now versus the US? Sort of what are you seeing globally at the moment?

LEE OLESKY: Well, we're for-- you know, TradeWeb is fortunate. We do have a global presence. So even in terms of handling a crisis, we have offices and in Asia and China. And so we were a little bit ahead of the curve in terms of getting our folks remote, and reacting to this situation.

In terms of trading, you know, we're much more of a fixed-income shop. We do an awful lot of ETF activity. That has been very vibrant, and I think has held up incredibly well on our system and across the board.

But the-- there hasn't been-- I wouldn't say that there's a geographic sort of situation that we're seeing across all of our-- all of our markets globally.

BRIAN SOZZI: Lee, we've seen a mountain of government debt been issued. We've seen a mountain of corporate debt issued. Are these tailwinds to a platform like yours?

LEE OLESKY: Well, I think the answer is probably yes. But it's very hard to project volumes or rates or anything kind of going into the future. What I would say is we have a great challenge ahead of us in terms of the many trillions of debt that's going to be hitting the markets in the coming months and years that will need to be distributed, digested, and I do think ultimately traded.

So when you have this kind of surge of issuance, we're in such uncharted territory that it is hard to kind of predict exactly what the results will be. But I think what's more important for a firm like TradeWeb, which is in electronic trading for fixed income, is that we do see an acceleration of more activity occurring electronically. And I think that that's-- for our business is a really critical component, rather than just the markets going up and down.

ALEXIS CHRISTOFOROUS: And Lee, how are you thinking about your new normal, when we're no longer working from home? How will business at TradeWeb be different?

LEE OLESKY: Yeah, that's a great-- that's a great question, and something that we talk about a lot internally, and are strategizing on. I think for sure, things are not going to go back to where we were prior to-- you know, in January and February. It's a big change.

And I think it's like a lot of things-- if you're an optimist, you can kind of see the light, and you can think of the great things that we'll get out of this. And if you want to be a little bit negative, you can see some of the challenges obviously underlying all that is a huge health crisis. And the economic impact is so severe. I don't mean to make light of it.

But I do think that the-- in terms of working remotely, we're going to see significant change. We've been able to do it quite-- quite easily, in some respects. There are certain things that we do that require face-to-face. But we've been able to work remotely incredibly well.

And I think we're going to take away from this a new way of approaching things. And I don't think we're going to go back exactly. It doesn't mean we won't have offices and we won't go back into offices eventually. But I think the dynamics are going to change considerably.

And it's not-- it's not just TradeWeb. I think this is really across the board.

ALEXIS CHRISTOFOROUS: Oh, I think you're right there. I don't think any sector will be left untouched. Lee Olesky, CEO of TradeWeb, thanks for being with us this morning.

LEE OLESKY: Thank you, guys.