what does everyone think about the trading services aka swapswire, tzero, markit, trioptima?they provide straight through processing services for broker/dealers/buy side, electronic tradingof derivatives, credit reference data, multilateral tear up services, etc.i understand most of these work on some per trade fee schedule and it seems like they're catchingon in the market. i think the only thing to worry about is increased competition from other vendors, but do you thinkthat these companies make a lot of money in the market?i can understand how markit, which is owned by a consortium of banks, may not have unlimited profits,but what about swapswire, esp if everyone subscribes to their services and pays $1/trade, or whateverit costs?wondering about the scalability and sustainability of the services that these companies provide.

I use swapswire quite a bitIts OK but in some way these systems would have been of much bigger benefit a number of years agoTheir main advantage is that its an autoconfirmation process meaning that there isnt any need for back office to check confirms because trades are autoconfirmed by the system itself. Now that in itself is a good thing but banks back offices had already automated a lot of the detail matching on vanilla trades anyway (which is what swapswire really is about) with things like SOX directives becoming important. So basically if we had swapswire in 2000 it would have been seen as a massive step forward. Now in 07 its not SUCH a big benefit. A lot of small brokerage houses by the way hate to use these types of systems and some of them have refused to install it at all because they say the fees are too high. I have no idea what the charges are but I assume that they are making a decent enough profit. The barriers to entry in this market are fairly high once one system is already established...

buy side pays nothing. sell side pays $1 per trade. when you think of how many swaps go thru swapswire, this may be generating quite a few bucks..i agree. the first provider to hit critical mass will be making money hand over fist.