Chris Gerosa: Yes, Chris, I’m happy to take that one. And I think the way to think about high-grade is, we are seeing record levels of activity even in the fourth quarter in our Open Trading all-to-all solution. So we are seeing gains in terms of Open Trading hit 33% of our total volume in Q4, so we are seeing gains there. We are also seeing gains in our portfolio trading solution in high-grade. We had record volume in PT in high-grade of $17 billion up close to over 90%. So we’re making gains. Obviously direct dealer RFQ has been running flat for us. We also made gains in our dealer RFQ, sorry, was up 23%. But when I look at high-grade and high-yield full U.S. corporate credit, the overall activity from our clients is still positive and you’re obviously seeing those big gains in high-yield.
But again the high-yield gains are driven by our Open Trading volume which ADV grew by 43% in the Q4. So, overall credit activity on the platform is showing signs of substantial growth, particularly driven by Open Trading.
Christopher Allen: Got it. And then just wanted to ask, I mean, obviously the environment looks like it’s trending positively in a number of different areas and I agree with Rick in terms of the opportunity to get better. But when I think about things under your control, just automation tools have been a key focus for you. Where are we at in the rollout of products and capabilities around automation tools and the new things on the horizon and commerce are more just blocking and tackling around existing products and where are you from the customer penetration, particularly in the buy side there?
Chris Gerosa: Sure. Automation continues to be a driver of activity on the platform. It had nothing but records across the Board in Q4, record volume of $62 billion in our Auto-X solution and then overall trades on the platform was automation accounted for 20% of total trades on our platform. So we — not only did we see heightened growth in Q4, but overall the year of 2022 sort of record volumes of total of $220 billion in automated volumes. As we look forward in 2023, we continue to hear from our largest clients around their cost controls that they are facing, particularly given the AUM performance of 2022. So they are facing bigger and bigger tech challenges and looking to us to help outsource some of those challenges in workflow solutions like our automation tools.
As I mentioned in our open remarks, we are launching in the first half of this year what we’re calling Adaptive Auto-X, which is a true client algorithm which adapts to market conditions as it trades. So it’s a unique solution that’s being rolled out for the first time in credit trading in the U.S.
Richard McVey: Just a couple of comments to add to Chris’s points is that, quantitative easing caused significant changes in client asset allocation over the last three or four years, and the net result was underweight fixed income because of the zero interest rate policies around the world that has now changed. So I think what you’re seeing is the very beginning stages of people starting to reallocate into fixed income, and you see it with the mutual fund inflows kicking off the year, the retail numbers are way up, the ETF assets are growing and a lot of this is driving small tickets. Some of that retail money is coming into SMA accounts, some of it into ETFs, but all of it with just this massive growth in tickets. So it’s not an option to automate, it’s a requirement.
And I think we’re going to continue to invest in tools to help our clients with that. And I would expect a very robust year of automation growth this year. On the institutional side, the other thing I would add, Chris, is that we are still seeing as a result of the massive amount of trading opportunity that’s now in our Open Trading order books significant increases in market participants, both in market makers as well as systematic credit funds. So all of this points to the fact that fixed income is a better investing and trading environment now than it was for years due to quantitative easing and that’s one of the reasons that we’re excited about 2023.
Christopher Allen: Thanks guys.
Operator: The next question is from Kyle Voigt with KBW. Your line is open.
Kyle Voigt: Hi, good morning. Chris Concannon, yes. You mentioned a comment about flexibility to fine tune your pricing over time in relation to Open Trading, right now where you’re adding the most value to clients. I guess, how much room do you think there might be to fine tune that pricing over time and how do you kind of balance potentially making pricing changes with maintaining pricing and trying to incentivize as much flow as possible to move in that direction?
Chris Concannon: Well, first of all, we’re very careful about how we adjust pricing historically and over time. We do want to continue to deliver that high value execution quality that you see in Open Trading. The value of open trading gets sizable across product. We saw the value being delivered in high-yield in particular, which increased the demand for our high-yield Open Trading offering given the growth rates in high-yield and OT of over 40% and the overall growth rate of our high-yield offering. I would say we’re very careful about fine tuning pricing, particularly around OT, but we’re confident in the flexibility that we have given the sizable savings that we talked about in the opening remarks.
Kyle Voigt: And to be clear, we’re pricing adjustments made already or are they planned for 2023?
Chris Concannon: We have not announced any pricing plans for 2023. We’re quite comfortable with the current dynamic of our capture rate, because as behaviors change, and we saw that the behaviors changed obviously in 2022 to our detriment and capture in high-grade, but as those behaviors change in 2023 we’re confident that the pricing opportunity that we have in 2023 is quite positive given the behavioral changes that we’re already seeing.
