This Recent IPO Is Benefiting From Market Volatility
There are several themes that have been moving stocks during the recent pandemic-induced market volatility. For example, people are staying home, which had led to increased usage of streaming services like Netflix and online shopping destinations such as Etsy. One less-discussed theme is that all this volatility has also led to a spike in trading activity, which has benefited financial exchanges.
Tradeweb Markets (NASDAQ: TW), which went public in 2019, operates electronic trading marketplaces for various types of financial assets including government bonds, high-yield bonds, ETFs, and mortgage-backed securities. Many of the assets moved on Tradeweb's services are traded over the counter and do not have a great deal of trading volume. Therefore, the company's exchanges assist market participants in finding liquidity at a lower cost than bank traders would charge to do it over the phone.
The whole financial exchange industry has observed robust growth in trading volumes since the pandemic hit investors' radar. Tradeweb reported its trading volumes grew by 39% year over year in the first quarter.
Source Fool.com
