OpenDoor Securities LLC (“OpenDoor”) has launched the first ‘all-to-all’ marketplace for on-the-run (“OTR”) U.S. Treasuries. 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 roll-out is in direct response to voiced concerns regarding the negative impact of information arbitrage as well as the dearth of liquidity experienced during times of stress on traditional trading venues.

Concerns about information leakage have been underscored by the recent crisis. The ability for institutional investors to source and trade large blocks of OTRs directly and anonymously on the OpenDoor platform will not only improve execution quality but will also provide an additional mechanism for market participants to clear risk without market impact.  

OpenDoor is experiencing an uptick in volume in its less liquid off-the-run (“OFTR”) issues and anticipates the same in OTRs. Combined order volume on the platform in May and June doubled the volume from January and February. More importantly, OpenDoor’s buy-side to buy-side match rate has increased to a record 70% since the launch of its new protocols and continuous order book on January 6th of this year.

“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," said Susan Estes, CEO, President, and Co-founder of OpenDoor. “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.” 

OpenDoor’s matching engine sits on the cloud eliminating any datacenter colocation advantages or disadvantages for speed of execution. All participants adhere to the same set of rules including a minimum size requirement of $10 million. These elements combine to create an incentive structure where institutions can find one another without fear of being disadvantaged, all while protecting their information content.

With over 70 buy-side firms and numerous dealers trading on the platform, OpenDoor’s expanded offering caters to a variety of trading styles and allows a more diversified user group to connect with new counterparties.