Tradeweb Markets Inc (NASDAQ:TW) Q2 2020 Earnings Conference Call - Final Transcript

question. I think while we're in this, and Lee talked about the sort of habits that are getting formed in this sort of unique moment and time around work from home, I think there are two really interesting issues that are front and center on our clients' mind around work-from-home environment, one of which is how do I increase my certainty of execution and the other is how do I minimize what I would describe as information leakage.

And I think to your question which is a really good one, there is an elegance around portfolio trading in terms of how it solves for both of those issues. And I think it just continues to build momentum. And I think these habits are continuing to form around this, the sort of search for liquidity in the market. And I think this is the moment where that light bulb continues to kind of burn very bright around portfolio trading. And clearly, it is an innovation that is leading us around our institutional market share gains in credit.

Got it. Thanks for that. And then if you could, any color on the impact to the fee per million as these trends play out?

I'll let Bob. Bob, you want to handle that one?

Bob, you are on mute.

Sorry, I was on mute. I was on mute. I apologize for that. Sure. I want to talk at the higher level, but as you know, for credit, high-grade and high-yield, this session protocol, basically, there's a bunch of pieces to it, and for the trade, it does have a higher -- does have a good fee per million that we -- that's part of it. And so as it goes up, it does have an impact, but the real mix trend there was our increase in high-grade trading, in general.

Appreciate it, guys. Thank you.

Thank you. Our next question comes from the line of Alex Kramm with UBS. Your line is open.

Hey. Good morning. Lee, thank you for the comments at the end there about July. Seems like generally doing pretty well, but the IRS business, as I think what you can see, is doing fairly poorly. So any comments of what you're seeing there? I think you've noted it's your biggest business, so anything that you see there and what may change that? And then maybe to Bob, very related, if these conditions persist, is a weak IRS business enough to tweak the compensation a little bit or is that too small of a business to really have an impact as an offset? Thanks.

Yeah. Thanks, Alex. Yeah, sure. Look, our rates -- let me start off at a higher level and say, our rates business is definitely facing a mixed macro environment, right? So we have volume headwinds, as you're pointing out, now due to the volatility -- very low volatility, flatter yield curve. That reduced relative value trading and slowed up the swaps markets. And that's really across