Earnings Call Transcript - TW Q3 2020

Operator, Operator

Good morning and welcome to Tradeweb’s Third Quarter 2020 Earnings Conference Call. As a reminder, today’s call is being recorded and will be available for playback. To begin the call, I’ll turn the call over to Head of US Corporate Development and Investor Relationship, Ashley Serrao. Please go ahead.

Ashley Serrao, Head of US Corporate Development and Investor Relations

Thank you and good morning. Joining me today for the call are our CEO, Lee Olesky, who will review the highlights for the quarter and provide a business update; our President, Billy Hult, who’ll dive a little deeper into some growth initiatives; and Bob Warshaw, our CFO, who will review our financial results. Our third quarter earnings release, prepared remarks, and accompanying presentation are available on the Investor Relations portion of our website. I’d like to remind you that certain statements in this presentation and during Q&A may relate to future events and expectations, and as such, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements related to, among other things, our guidance, including full-year 2020 guidance, and the COVID-19 pandemic, the potential impacts of which are inherently uncertain, are forward-looking statements. Actual results may differ materially from these forward-looking statements. Information concerning factors that could cause actual results to differ from forward-looking statements is contained in our earnings release and periodic reports filed with the SEC. In addition, on today’s call, we will reference certain non-GAAP measures. Information regarding these non-GAAP measures, including reconciliations to GAAP measures, are in our posted earnings release and presentation. Lastly, we provide certain market and industry data which is based on management’s estimates and various industry sources. See our posted earnings presentation for more details. To recap, this morning we reported GAAP earnings per diluted share of $0.19. Excluding certain non-cash stock-based compensation expense, acquisition and Refinitiv-related D&A and certain FX items, and assuming an effective tax rate of 22%, we reported adjusted net income per diluted share of $0.30. Please see the earnings release and the Form 10-Q to be filed with the SEC for additional information regarding the presentation of our historical results. Now, let me turn the call over to Lee.

Lee Olesky, CEO

Thank you, Ashley. Good morning, everyone, and thank you for joining our third quarter earnings call. The world is uncertain due to various political, climate, health, and social challenges. At Tradeweb, we are facing cyclical macro headwinds from reduced rate volatility and lower yields, which are partially obscuring the positive secular and organic growth in our rates, credit, and money market asset classes. Our team is focused on the future and is dedicated to executing our growth strategy by managing what we can control, including actively engaging clients, innovating with technology, and enhancing trading workflows to gain market share. As we concentrate on revenue growth, we believe we are enhancing our earnings potential, positioning Tradeweb to benefit when volatility returns and when interest rates rise. Our message to investors remains consistent. We are committed to leveraging the secular tailwinds supporting our business to drive revenue growth and margin expansion for the rest of 2020, 2021, and beyond, as our investments scale globally. Now, moving to slide 4, we achieved our strongest third quarter ever, setting new records for market share and volume in multiple products. Specifically, our gross revenues for the third quarter of 2020 were $213 million, reflecting a 5.9% increase year-on-year on a reported basis and a 4.7% increase on a constant currency basis. This revenue growth and scaling has led to improved profitability year-over-year, as our adjusted EBITDA margin for the third quarter expanded by 91 basis points to 47.4%. On the investment side, we continue to innovate with several early-stage initiatives. We launched our enhanced specified pool platform after working for a year with leading mortgage originators to create a feature-rich solution for this substantial market, which trades an average of $26 billion daily in the first nine months of 2020. We believe this offering enhances our capabilities in the TBA market. The high volume and spreadsheet-driven nature of the specified pool market make it ideal for automation, as we estimate current electronic petition levels are below 5%. Additionally, after another year-long project, Tradeweb has become the first offshore platform to provide foreign investors with electronic access to the China interbank bond market through CIB direct, complementing our existing bond-connect offering and nearly doubling our addressable market. Lastly, in US corporate credit, we continue to lead innovation, building on the rising adoption of net spotting in portfolio trading by introducing rematch, which connects our wholesale liquidity to our institutional and retail liquidity pools. Looking forward, our sales team is highly engaged, and we have a robust pipeline as we look ahead over the next 12 months.

William Hult, President

Thanks Lee. Turning to slide 7, for a closer look at swaps. Swaps remain a critical component of the Tradeweb story and one with considerable room for growth and innovation. We continue to operate with a growth mentality investing for the future. The broader industry backdrop in the third quarter for interest rate swaps remained cyclically challenging given low interest rate volatility. Industry volumes as measured by Claris were down 38% year-over-year during the quarter driven primarily by a 56% decline in lower fee per million overnight index swaps (OIS), which were pressured by reduced speculation on the front end of the curve. The higher fee per million core IRS market fared relatively better. Industry volumes here declined 29% year-over-year. But as Lee indicated, our volumes outperformed the overall market as our targeted investments continue to pay off. Specifically, our market share increased to a record 10.2% from 9.8% last year, driven primarily by gains within core IRS, our main market of focus, where shares rose to a record 17.5%. We were also pleased to be recognized by global capital as the OTC trading venue of the year for our consistent ability to pioneer the next generation of tools to access liquidity and inform trading decisions. We are continuing to innovate by responding to structural changes in the swaps market, be it the growth of emerging market swaps clearing or the transition to alternative reference rates. We are launching new protocols like RFM, adding new products like electronic FRAs and package swaps, and expanding regionally in APAC. Specifically, during the third quarter, we posted our highest single revenue day for EM swaps as large asset managers that are fully integrated into Tradeweb for major currencies leverage the same infrastructure to trade EM currencies. Clients have now traded $386 billion over the last 12 months. During the third quarter we added three new currencies bringing our total to 13 and completed our first Chinese interest rate swap trade. The momentum is building and today we have more than 40 clients and 15 dealers, both numbers doubling since the third quarter 2019. Looking ahead we continue to add more currencies and actively onboard dealers to provide liquidity for specific currencies. Clients are also utilizing list trading to trade risk, migrate positions from LIBOR to new risk-free indices like Sonia and SOFR, and switch portfolios between central counterparties in anticipation of Brexit. Like we have always done we are partnering very closely with our clients to help them navigate regulatory change. We are also continuing to grow our electronic solutions for historically voice-traded products such as swaptions and multi-asset package swaps. Clients have now traded $74 billion in multi-asset package swaps since our launch in August last year. Given the momentum we intend to add more currencies as we build this offering out. Our efforts to build a competitive wholesale fraud offering continue and the early signs are encouraging. We traded nearly $18 billion daily, a new record during the third quarter. Protocol-wise we are growing request for markets (RFM), which help clients protect their intent to buy or sell by requesting two-sided markets. We continue to onboard dealers to support this market. In some with global electrification levels and swaps hovering around 20% to 25%. We continue to strategically collaborate with our clients to migrate more business online. Real change is rarely instantaneous, but rather a series of day-to-day evolutions that combine to drive behavioral change. We are focused on listening to our clients across all our products to create win-win outcomes for them and Tradeweb.

Robert Warshaw, CFO

Thanks, Billy and good morning. As I go through the numbers, all comparisons will be to the prior year period unless otherwise noted. Let me begin with an overview of volumes on slide 9. We reported quarterly total average daily volumes of $780 billion, down 4.5% but up 5.4% when you exclude short tenure swaps. Areas of notable growth include mortgages, US corporate credit, global CDS, Chinese bonds, equity derivatives, and bilateral repo. Slide 10 provides summary of our quarterly earnings performance. Despite the lower volumes which were mainly driven by short tenure swaps, third quarter volumes translated into gross revenues increasing by 5.9% on a reported basis and 4.7% on a constant currency basis. We derived approximately 36% of our revenues from international customers. Recall that approximately 30% of our revenue base is denominated in currencies other than dollars, predominantly in euros. Our variable revenues increased by 7.1% and our total treaty review increased by 5.5%. Total fixed revenues related to our four major asset classes continue to grow as expected up 3% year-over-year and 1% on a constant currency basis. Credit fixed revenue growth was primarily driven by the addition of new dealers in US credit and additional clients in Chinese bonds. Rates fixed revenue growth was driven by the addition of new dealers and swaps and the impact of FX. Market data increased by 10% year-over-year led by Refinitiv, APA, and proprietary data products. Adjusted EBITDA margin came in at 47.4% and expanded by 91 basis points relative to third quarter 2019 as we continue to benefit from scale. All in, we reported adjusted net income per diluted share of $0.30. Moving on to fees per million on slide 11. The trends I'm about to describe are driven by a mix of the various projects within our four asset classes. In sum, our blended fees per million increased 12% year-over-year, primarily as a result of the mix shift away from lower fee per million short-tenor swaps and towards higher fees per million high-grade and high-yield credit. Excluding lower fees per million short-tenor swaps and futures, our blended fees per million was up 1% year-over-year.

Lee Olesky, CEO

Thanks Bob. In sum, despite macro challenges, market share gains and volume increases continue to drive growth today. And we believe it increases our future earnings potential. The secular trends powering electronic application and automation remain intact. We continue to operate with a growth mindset and we're focused on collaborating with our clients to capitalize on the various opportunities ahead of us across asset classes. The regional products and asset class diversity of our revenues was on display with another strong quarter for credit with rates, equities, and money markets having multiple growth levers, despite the noted macro challenges. In addition to organic growth, we continue to spend a lot of time evaluating potential M&A opportunities that we believe would further augment our growth as cash builds on our balance sheet. With a couple of important month-end trading days left in October, firm-wide volumes are up double digits relative to October 2019. We are happy to provide more detail during the Q&A. I'd like to conclude my remarks by thanking our clients for their business and partnership in the quarter. And I want to especially thank my colleagues for their efforts that contributed to our strongest third quarter in our history. With that, I'll turn it back to Ashley for your questions.

Ashley Serrao, Head of US Corporate Development and Investor Relations

Thanks, Lee. As a reminder, please limit yourself to one question only. Feel free to hop back in the queue and ask additional questions at the end. Q&A will end at 10:00 AM Eastern Time. Operator, you can now take our first question.

Operator, Operator

Our first question comes from Ari Ghosh with Credit Suisse. Your line is open.

Arinash Ghosh, Analyst

Hi. Thank you. Good morning, everyone. So Lee, the rates business right now has obvious macro challenges, plus there also seem to be several pockets of opportunity as we look at the overall business. So can you talk about maybe the structural deal wins and new initiatives that are perhaps less impacted by the low-quality backdrop as you look out over the next 12 months?

Lee Olesky, CEO

Thanks, Ari, good morning. That's an important question, and it deserves some time. One aspect of our rates business that we believe the market still underestimates is that many of our products are not yet fully mature, even after more than 20 years in the industry. Customer behavior is still evolving, and our products continue to attract interest, which enables our volumes to outperform more established rate sectors like futures and cash rate venues. Our main competitor is actually the phone, and there's a cultural shift needed to encourage people to adopt electronic trading. Additionally, our rates business encompasses more than just one product or client group. We deal with treasuries, European government bonds, mortgages, and interest rate swaps. This diversity is crucial because lower volatility in rates affects these products in different ways. Some products might experience increased issuance or specific monetary policy developments, which can create both advantages and challenges for us. It's essential to recognize that we primarily operate in an institutional marketplace that connects the buy side and sell side, which differs from futures or inter-dealer markets that are also part of our business but not as significant. Our growth is driven by a combination of institutional growth, a diverse product offering, and our investments aimed at driving behavioral changes. Specifically, in the government bonds sector, we are achieving new market share records by onboarding new clients and enhancing our share. Our streaming protocols, particularly within wholesale and institutional arenas, are significant growth engines. We're observing structural behavioral changes towards streaming protocols and a shift in market composition, particularly towards larger institutional clients in the last quarter, which are important themes to monitor. Regarding our other cash products, we see segments like mortgages benefiting from increased refinancing activity and a strong housing market, which is favorable for origination and TBA activity. We’re applying our focus on expanding liquidity in the specified pool market, which remains under 5% electronic. When it comes to derivatives, specifically swaps, they are more sensitive to interest rate fluctuations and the yield curve shape. Activity has decreased in the home market, as we've pointed out. Still, our clients have responded to periods of volatility in September and October, trading volumes at levels comparable to or even exceeding those from 2019. We're concentrating on electronic buying in traditionally voice-traded markets, such as multi-asset swaps and FRAs, while also broadening our product range into emerging markets and cross-currency swaps. As clearinghouses expand their offerings, we will likely benefit on the execution side. I realize that was quite detailed, but it underscores that macro factors are significant, yet we are not as dependent on them as some of our competitors. Our volumes reflect our continuous growth mindset and the numerous opportunities we see to drive change and enhance electrification in the rate sector while maintaining a competitive edge.

Operator, Operator

Thank you. Our next question comes from Rich Repetto with Piper Sandler. Your line is open.

Richard Repetto, Analyst

I'm sorry to keep asking about the rates question, but it significantly impacts your revenue. This is the first quarter where you experienced single-digit year-over-year revenue growth, likely due to the rates. I would like to gain insight from your experience, as you've navigated through cycles in the past. Can you discuss any historical instances where growth slowed yet you identified growth opportunities? Is the potential for growth greater now, or is this slowdown more concerning? Additionally, you mentioned fintech in your prepared remarks, particularly regarding new proposals for regulating Treasury trading platforms and the potential effects on your different trading platforms in the Treasury space.

Lee Olesky, CEO

Let me address this. Regarding the first part of your question about historical slowdowns, while we have seen some slowdowns over the last 20 years, this specific situation, especially with the coronavirus and the zero interest rate environment, is unique. Although it is an extreme challenge for many, it is not the first time we have experienced similar market activity. It's worth noting the diversity of our business; for example, our credit business grew by 27% last quarter, becoming a $50 million business in just that period. Different markets show varying levels of activity, and this diversity is important for us. Despite a low rate environment, we’ve observed increased government bond activity, while derivatives have slowed due to market volatility. We shouldn't worry too much about fluctuations over a few weeks or even a quarter. The key trend continues to be the shift to electronic trading across markets, and many of our markets still have a long way to go in this transition, with derivatives being a prime example. We remain optimistic about future growth, understanding that some of our products may perform better or worse depending on market conditions. We are especially enthusiastic about our rates business. As for the second part regarding FIMSAC, the last public meeting addressed events from March and April. Tradeweb discussed the corporate and municipal bond markets during this time. It was a notable period where we saw a tremendous shift as many clients adapted to remote work in a short span, showcasing the market's strong infrastructure. There were instances of unprecedented volatility and trading volumes, including a day where we handled $1.5 trillion worth of transactions, averaging about $1 trillion per day in March. Our team managed this transition exceptionally well, but it was a collective effort across the market. In terms of regulatory developments, FIMSAC has been doing commendable work focusing on fixed income markets and looking for improvements. We believe aligning the regulatory framework among regulators and broker-dealers will be beneficial. Given the changes in fixed income platforms and electronic trading, it’s time for a renewed focus on modernizing and aligning regulations for a smoother interpretation and operation.

Operator, Operator

Thank you. Our next question comes from Mike Carrier with Bank of America. Your line is open.

Dean Stephan, Analyst

Hey guys this is Dean Stephan on for Mike Carrier. My question is for Billy, given attractive volume growth in 3Q, can you update us on the outlook for both portfolio trading and net spotting. Have you guys seen any significant shifts in either client behavior or utilization? And then finally what are your thoughts on the competitive landscape given new launches and collaborations from several competitors? Thanks.

William Hult, President

That's a great question, thank you. Lee has explained well the significant changes related to working from home. If we could design an ideal product for this environment, it would likely be focused on portfolio trading, addressing issues like execution leakage and uncertainty. It truly seems like a perfectly suited product for this moment, and we are witnessing clear positive results. We've discussed a lot about net spotting and net hedging, which have created important insights for our clients, leading to notable efficiencies and cost savings. As we've expanded our credit business, as Lee mentioned, net spotting, hedging, and portfolio trading have all played a key role. We're also excited about the potential for entering both the wholesale and retail markets, as market structures can change rapidly, and we want to stay ahead of those changes. We are committed to being proactive. Regarding the competitive landscape, especially in credit, we consistently believe the market desires competition in this area. Over time, we've established a significant presence and are recognized as a competitive force in credit. As the market is lucrative and expansive, we anticipate more entrants, but we will stay focused on our strengths, which are problem-solving for clients and addressing their needs effectively. Thank you for the question.

Operator, Operator

Thank you. Our next question comes from Jeremy Campbell with Barclays. Your line is open.

Jeremy Campbell, Analyst

Thank you, Lee. I know you've already discussed rates at a high level in response to Ari's earlier question, but I’d like to delve a bit deeper into MBS since low rates affect MBS prepayments. Could you first remind us how overall refinancing originations and MBS prepayments relate to the total MBA trading volume on the platform? Also, we’ve talked about specific tools with low prepayment characteristics that are currently in demand. You mentioned that less than 5% of that market is electronic, and I know you've recently improved your electronic platform. Could you share more about client interest and demand for that enhanced platform and any objectives for how quickly it could gain traction and increase that electronic percentage in that sector?

Lee Olesky, CEO

Thanks, Jeremy. Since Billy oversees our mortgage business, I’ll let him handle this question. I believe we have the leading expert in that area on the call, so my partner Billy can address it.

William Hult, President

Yeah, I mean sure, sure, the question is a really good one, you described it really well. And what we are we have this really strong TBA mortgage trading franchise. We are very hooked into the originator community, the more refi the better. And this is a moment in time that kind of plays to that business very well. As we kind of move forward in mortgages around specified pools, what's interesting in some ways is that you know clearly our TBA focus and our TBA franchise is going to help us dramatically because we have the clients we have the end users, we’re connected we have the brand and we have the credibility. But what I would also say is in an obvious way specified pools trade on spread in a very similar way that corporate bonds trade on spread. And so the domain understanding of how these securities trade is very, very helpful to us as we kind of build out this specified pool platform going forward. We have all the kind of pieces of the puzzle, and we're putting them together. And so we’re feeling very confident as we kind of move forward with our specified pool platform.

Operator, Operator

Our next question comes from Alex Kramm with UBS. Your line is open.

Alex Kramm, Analyst

Hey good morning everyone. Lee, I guess you mentioned or gave a quick look about October I think double digits overall was the comment you made since nobody else has asked I would be interested in what additional color you can give us by asset class and cash versus derivatives. So we have a better idea how things are trending in the fourth quarter? Thank you.

Lee Olesky, CEO

Oh, thanks Alex, always a tricky one right. So let me just say we still have a couple of very important month-end trading days for October at a particularly interesting time for everybody. But the one comment I'd make is October is trending close to double digits in terms of revenue growth just rather than getting into the detail of volumes, which can be confusing. I'm not going to get specifically into volumes we’ll release that next week. We believe we continue to gain share across many of our products. Rates have seen a continuation of the themes that characterized the third quarter. Swaps are better but remain challenged. Mortgages and government bonds continue to grow. The credit space with IG and high yield, those markets are running higher than September 2020 at really record levels for us. The acceleration was all network and other things. Money markets is a particularly strong month growth in Repo. Client focus on that. Equities is a good month for the ETF and derivative space. Overall our team, our client onboarding, and sales team have really been very busy engaging clients and our technology team of 300 plus are it is rolled out another software release recently and are continuing to crank out new features and new functionality. And are working hard on the next set of innovations and enhancements so we're feeling pretty good about October, but we have two more days to go here. But things have been as I said sort of in this trending towards a close to double digit revenue growth.

Operator, Operator

Thank you. Our next question comes from Ken Worthington with JP Morgan. Your line is open.

Ken Worthington, Analyst

Hi, It’s Ken Worthington. Thank you for taking my question here. I wanted to ask maybe on the transition from LIBOR to other benchmarks like SONIA and SOFR. To what extent is that having an impact on trading activity, are these transitions having any bearing on either usage or adoption of your trading tools and products? Thank you.

Lee Olesky, CEO

I'll take that, Ken. One of the challenges of working remotely is that we can't see one another. I'll begin and leave space for others on our team to contribute. We've been pioneers in many areas and have been preparing for this transition for quite some time as the market has as well. We just completed one of the first trades using SONIA, and it's progressing. We are ready for this transition as the market starts to adapt. There are many other developments occurring in this market, which might overshadow this transition compared to other scenarios involving market dynamics and politics. However, we are confident that this isn't a fundamental shift for our business; it's a significant change in general, but we are well-equipped for it. Most of our clients seem prepared, as larger firms are actively addressing these changes, while smaller organizations are either ready or in the process of preparing, though some are lagging behind those with more resources to dedicate to these issues. Nonetheless, I don't view this as a significant concern for Tradeweb or the markets overall. If anyone from our team wants to add anything, we’re running out of time.

Operator, Operator

Thank you. Our last question comes from Ken Hill with Loop Capital. Your line is open.

Ken Hill, Analyst

Yeah. Thanks for taking the question. Lee, I just wanted to follow up at the end of your prepared remarks you mentioned you're spending a lot of time evaluating potential M&A opportunities. That’s hoping you could flesh that out a little bit maybe talk about what capabilities or opportunities you see in the market right now that might look more attractive given the cash build you guys have on your balance sheet. Thanks.

Lee Olesky, CEO

Certainly. We dedicate significant time to this effort, and we have a team focused on mergers and acquisitions, particularly in the nonorganic space. We're continuously assessing various opportunities based on strategic direction. Our focus is on what makes sense for our business. As you noted, we are mindful of the cash reserves we have. We anticipate ongoing consolidation in the market, which will present several opportunities. We're always exploring ways to expand our customer network. Recently, this led us to enter retail and wholesale markets. We are keen on adjacent markets and new geographies, as well as enhancing our capabilities. It's well recognized that there is a high demand for tech talent, so pursuing mergers and acquisitions is a strategy to bring in more tech expertise. Rob, would you like to add anything regarding the mergers and acquisitions aspect?

William Hult, President

Certainly. We are currently building our cash reserves and have $500 million in credits that we haven't utilized yet. We believe we could leverage 3.5 to possibly four times our EBITDA on a net debt basis. It’s crucial for us at this time, considering the changes in the marketplace and the ongoing consolidation trends, to be prepared for opportunities when they arise. We want to ensure we have the right assets and capabilities in place. Internally, we've been discussing the importance of aligning potential acquisitions with our growth objectives while also meeting our performance standards to ensure that any acquisition is accretive. Therefore, we are actively evaluating and preparing ourselves to identify the best opportunities.

Operator, Operator

Thank you. Our next question comes from Alex Blostein with Goldman Sachs. Your line is open.

Alex Blostein, Analyst

Thank you for allowing me to ask my question. I would like to hear your thoughts on the recent approval you've received regarding your bank line business in China. Could you discuss how this might expand your addressable market and how it could potentially lead to better revenue growth and impact the profitability of that business? Thank you.

Lee Olesky, CEO

Certainly, thank you for your question. Let me provide some context. We are still in the early stages of the market's evolution. More foreign institutions are connecting to bond-connect through Tradeweb, and we were pioneers in this area, having opened this channel for our customer base in 2017. We now have nearly 400 institutions and over 1,700 funds participating. Our latest initiative pertains to access to the China interbank bond market, which is a relatively new northbound channel providing our clients with electronic access for price discovery, transparency, efficiency, and coverage. We view this as a significant opportunity. China is the third-largest bond market globally, valued at $13 trillion, yet less than 3% is held by foreign investors, compared to about 30% in the U.S. We've established a local presence in Shanghai to leverage this first-mover advantage and are actively engaging in the market. We believe it is a considerable opportunity. It's about innovation; we were the first in 2017, and now we have an integrated messaging tool as Chinese bonds gain acceptance in global benchmarks. We have included Putsy Russell as well, highlighting this significant opportunity. However, forecasting timelines involves uncertainty, largely dependent on liberalization by the Chinese government and market acceptance of the substantial debt. Nevertheless, we continue to invest and believe this presents a very meaningful opportunity for us.

Operator, Operator

Thank you. And our last question comes from Kyle Voigt with KBW. Your line is open.

Kyle Voigt, Analyst

Hi thanks for taking my question. Maybe just a question on credit trading. I think one of your private competitors is seeing significant success in new issue trading and you’re the largest public competitor also launching a CLOB-like offering to address that more liquid part of the corporate bond market. So just wondering if we can, can update on the strategy for attacking that more liquid part of the market and also wondering if you're seeing any institutional client demand for a CLOB or CLOB-like trading for US credit.

William Hult, President

Hey it's Billy, so listen you know I'll make the joke that we're not going to give away too many kind of company secrets exactly in this form. But we’re, we're watching all, all of the developments around new issuance in the way that you would expect us to. And it’s certainly a business that we've looked at and that we're sizing up and that we are very well aware of. In terms of your question which is a good one around sort of you know the central limit order book pricing in credit that's a little bit kind of if you think about it that's a little bit out of our rates playbook. And it's a type of business that we know extremely well. So again, kind of eyes wide open we are very well aware of how things are developing in that space. We are going to continue to do what we sort of are focused on in credit and some of those things I would describe around kind of continued innovation around portfolio trading. We love the concept of access and inventory and credit and we are going to have kind of eyes wide opened around potential changes in the market structure around credit. And we are certainly aware of everything that's happening around from pricing.

Operator, Operator

Thank you. And at this time, I would like to hand the call back over to Mr. Lee Olesky for any further comments.

Lee Olesky, CEO

So I would just, I thank you guys all for just joining us this morning and for your thoughtful questions, and we look forward to talking to you after our fourth quarter and we are through some really interesting period of time here, especially in the US and also in Europe. So stay well and thanks for joining us this morning. Take care.

Operator, Operator

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone have a wonderful day.