Richard Schiffman: Yes, Dan, I’ll just add to that. I mean it’s definitely here to stay. It provides a lot of benefits to clients in terms of the workflow. It’s going to be interesting to see what happens when the market environment changes and volatility increases and the PT becomes a relatively more expensive trade, whether it’s still going to maintain the kind of percent of the market right now, we’re seeing roughly around 10%. Whether that number goes down, stays the same, I would not think that that’s a number that’s going to rise in a high vol environment when it becomes relatively more expensive versus doing trades in comp. So something to consider.
Daniel Fannon: Great. Thank you. And then just as a follow-up on expenses. I know it’s early in the year, but you’re already tracking towards the low end of the guidance for this year. So I guess, first, kind of what has changed since the initial guidance a couple of months ago? And then as we think about the rest of the year and the factors are going to take you to the lower than the low end or back towards the midpoint or higher? What are those? Is that just volumes? Is it market share? What are the other factors?
Stephen Davidson: Hi, Dan, it’s Steve here. I think if you step back, I think we’re exiting a period of some pretty substantial investments that we’ve made with X-Pro, our proprietary data ADX. So I think we’ve come out of that period. In the fourth quarter, we achieved some significant efficiencies coming out of the year. And I think what’s going on in the organization is that we’re more disciplined as we look at the expense base coming out of that spending. And we’re looking for opportunities to really be more efficient across the board, but at the same time, ensure that we’re really maximizing our investments for the future because we do have that huge runway. So I think that as we went through the first quarter, I think we saw some opportunities to achieve incremental efficiencies.
I think that as we move through the year, you’ll probably see a bit of a bump up in terms of incremental new hires given the normal seasonality. But I think that the first quarter run rate in terms of comp is probably a pretty good place to be, $61 million or $62 million, and that reflects the incremental hires that we should be making throughout the remainder of the year. But just remember that there is that seasonality in terms of our hiring through the year. So I think we feel pretty good coming in at the end — at the bottom of the range right now. And obviously we’ll continue to monitor that and update you as we progress through the year.
Christopher Concannon: And I would just remind you that 18% of our expenses are variable. So that’s the piece that can move up or down with volumes. So that’s an important component to how we think about our guidance. And as we mentioned earlier in the call, we’re tracking to the lower end of our guidance, and it’s just too early to update where we think we’ll end up being in the year.
Daniel Fannon: Great. Thank you.
Operator: Our next question comes from the line of Jeff Schmitt from William Blair. Please go ahead.
Jeff Schmitt: Good morning. On X-Pro, thinking how does it execute portfolio trades differently than what you were doing sort of prior to its rollout? And I guess importantly, though, like how does it compare to competitors now? Do you have any edge there?
Richard Schiffman: Hi, Jeff, it’s Rich. As you note, so from an execution perspective, it’s consistent, and we have the back end of the trading system that’s managing this. The real productivity gain and the difference maker is on the front end and how traders interact with our capabilities, okay? So think of X-Pro, it’s a modern interface. It’s designed to better handle large lists and be able to manipulate them more readily, which is something that was more challenging, let’s say, to do in our legacy application. So the back end, it’s leveraging all of the capabilities that we have in terms of how we process trades and how we send them through post-trade and downstream to the parties. But it’s that interaction at the front level, at the user interface that is really making a difference.
And that is where we’re going to be doing all of our new front-end development is in this new tool. So we’re saying earlier, it’s not just isolated to PTs, although that’s where our major focus is at the moment, but it’s also going to be the front end that traders use for the high-touch initiative, and it’s already actively used today by traders who need to manage large lists, for example, so it can do several hundred line items in comp, RFQ in comp much more easily than we can do in the old interface. So that’s going to be the area of significant investment for us and we believe that’s going to be well received by the traders and will lead to more business.
Christopher Concannon: And Jeff, I’d just add that X-Pro, both the portfolio trading tool and X-Pro for RFQ are all built in cloud-based technology. So it’s all new tech that we’ve rolled out here. It also allows us to make changes and introduce new features and functionality in a more rapid development environment. So we’ve seen changes rolled out from — really from trader feedback back out into production within weeks rather than within quarters and months. So it’s a very powerful tool, not just from the proprietary data that we can embed in it and all the pre-trade functionality that we can offer a trader, but it’s also — it speeds up our delivery to market, any new features, functionality or data that we’re providing. So that makes it highly competitive for us in an already competitive environment.
Jeff Schmitt: Great. And then a question on your high-grade market share. Could you discuss how institutional RFQ share is trending? I mean, is that a part of — in the drop at all? Thank you.
Richard Schiffman: Yes. On the share, I mean, we did see a bit of a decline. We are — upon analyzing that, it’s definitely due to the pickup in portfolio trading that occurred and also on the dealer business. We attribute it mostly to those two factors. And hence, the extra effort that we’re making in both of those areas. Those are the two significant investment areas for us to regain share. We think in terms of our in-comp client dealer RFQ business, on very solid grounds with that and Open Trading being the difference maker in terms of the liquidity pool and our ability to do all of the in-comp activity very efficiently for clients. So it is largely due to the challenges in PT right now and dealer business, dealer-initiated business.
Christopher Concannon: I would just add that our high-grade market volumes did increase in Q1 by 18%. Our block trading ADV increased as well. And more importantly, our automation continues to grow within the high grade market. That’s one area where we’re highly penetrated throughout that area, and we continue to see more automation ramping up. And Q1 automation was up 40% and that automation volume is quite sticky. We see people moving into automation and remaining at those levels. So across the high grade market, we’ve seen growth, we’ve seen records and more importantly, we’ve seen sizable penetration with our automation solution.
