GS is expanding the reach of its automated bond trading program, labeled "GSA" for Goldman Sachs Algorithm, that is offering to buy and sell highly rated corporate bonds. The new system only caters to oddlots, or trades worth less than $1m. Goldman is likely hoping the system can free salestraders to concentrate on larger and more profitable trades. Plus, that it will be more a success than its earlier GSession's bond trading platform that was canned in 2014 after failing to gain traction! The question remains whether the buyside will truly trust a non-independent platform?
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Goldman’s automated trader to cut out bond dealer on the phone
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Dealing in equities and US government bonds is now almost entirely electronic and transparent, but two bonds sold from the same company can have a variety of differing risks — based on its size, maturity and structure — and are not interchangeable, like a stock. It still relies heavily on voice trading or messaging to establish prices.
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