Frequently Asked Questions
What is opendoor?
OpenDoor Trading, LLC is an independently owned company that through its wholly owned subsidiary OpenDoor Securities, LLC ("OpenDoor") has designed a unique and cost effective platform enhancing liquidity across the principal pain points in US Treasuries. OpenDoor unlocks liquidity in the U.S. Treasury market via an anonymous, sponsored, All-to-All session-based platform where institutional investors, traders and dealers reduce costs by trading at mid-market levels or better, with zero information leakage.™
What are the benefits of trading on the OpenDoor platform?
OpenDoor offers superior execution, better liquidity and anonymous trading. Unlike RFQs systems, Single Dealer Platforms, and Central Limit Order Book, OpenDoor directly connects buyers and sellers through a new session-based trading protocol, providing open and equal access with no price discrimination.
WHAT TYPES OF SECURITIES TRADE ON THE OpenDoor PLATFORM?
OpenDoor is a session-based platform for trading in US Treasury securities. The platform volume matches buyers and sellers in Off-the-Runs (OFTRs), TIPS, and On-the Runs (OTR’s).
HOW IS THE OpenDoor PLATFORM DIFFERENT FROM OTHER TRADING PLATFORMS?
OpenDoor is the only sponsored All-to-All session-based platform focused on market making in OFTR and TIPs Treasury securities. While the solution in the past has been sell-side driven, the future must integrate the buy side for additional liquidity. All-to-All makes buy side an integral player in this process while the session-based system channels liquidity at particular points in time.
CAN ANYONE JOIN THE TRADING PLATFORM?
The OpenDoor platform is open to Sponsors that are FICC netting member's. End user's clear via their Sponsors.
HOW DOES THE MARKET STRUCTURE FOR TREASURY SECURITIES LEND ITSELF TO THE OpenDoor INITIATIVE?
Post-crisis financial regulation, low interest rates, years of unconventional monetary policy, and technological innovation represent a confluence of factors reshaping a Treasury market whose method of trading has changed little over the past several decades. With risk based capital and balance sheets sharply diminished among traditional market makers, the cumulative effect is reduced liquidity across the curve. OTR liquidity is unusually shallow, OFTR liquidity has decreased even more significantly, and the risk of financial instability has arguably risen. This makes the market ripe for the OpenDoor market-based solution, one that provides balance sheet compression, lower transaction costs, and greater liquidity.
HOW DOES THE OpenDoor TRANSACTION COST MODEL WORK?
Participants pay only volume-based transaction cost for transactions in OFTR’s and TIP’s. Users incur no cost to access the OpenDoor platform: instead they pay a volume-based transaction cost that is included in the clearing price of the transaction. They realize significant savings by transacting at a mid-market price.
HOW DOES THE TRADING SESSION UNFOLD?
Our trading protocol is low-frequency by design. By channeling trading to specific points in time, participants can leverage liquidity that would otherwise be diluted across the trading day. The volume matching session contains a Pricing Phase that contains a unique combination of streaming quotes, participant entries, historical data and algorithmic calibration to achieve optimal mid point prices. The Pricing Phase is followed by the Breathing Period and the Matching Phase. The trading session is measured in minutes, has zero information leakage™, and trading protocols ensures maximum participation within posted executable liquidity.
HOW IS THE PLATFORM DELIVERED TO THE USER?
Users login to the OpenDoor platform through a secure web-based portal.
ARE ORDERS EVER ROUTED TO THIRD PARTY TRADING VENUES?
No. All orders and transactions are matched with other members on the OpenDoor platform.
DOES OPENDOOR TAKE THE OTHER SIDE OF THE TRADE?
No. OpenDoor (via various self clearing Sell Side Sponsors) is the riskless principal to every trade: participants know their preferred Sponsor as their counterparty for all transactions on the platform.
DOES THE PLATFORM PROVIDE FULL STP OF TRADES, INCLUDING ALLOCATIONS?
Yes. As soon as the platform matches a trade, participants receive an electronic notice of execution in the format of their choice: FIX, CSV file via email, CSV file via ftp, Bloomberg VCON. Participants get to choose the format that easily populates their risk and settlement systems.
WHO IS BEHIND THE CREATION OF OpenDoor?
A core group of successful industry executives have come together to leverage their experience in investment banking, trading, portfolio management, technology and development of liquid trading systems. As a new entrant with these skills and relationships, the team operates without the constraint of operational boundaries. Operating at the intersection of electronic trading, volume matching trade protocols and automated trade processing, OpenDoor's management team is uniquely qualified to deliver solutions quickly and cost effectively.