The world of credit trading is abuzz with activity, and for good reason. Artificial intelligence spending has created a credit trading frenzy, with companies borrowing more and more to fund their AI projects. This has led to a record-breaking level of corporate-bond trading, with an average of $50 billion in investment-grade and high-yield bonds changing hands each trading day last year, according to Crisil Coalition Greenwich. This is a significant increase from the $46 billion traded in 2024, and marks the latest in a string of records for the market.
## Riding the AI Wave
Companies are turning to private markets to raise funds for their AI projects, with some notable examples including Meta Platforms Inc. and Blue Owl Capital Inc. raising about $27 billion of high-grade debt for a data center in rural Louisiana last year. This type of borrowing can spur more trading in private credit, as investors look to sell out of positions and take advantage of the growing market.
## The Benefits of Electronic Trading
Electronic trading has played a significant role in the growth of corporate-bond trading, allowing investors to buy and sell large blocks of securities in one fell swoop. Traders are adopting innovations long familiar to equities, such as fixed-income exchange-traded funds, electronic execution, and high-speed trading strategies. This has helped to slash corporate-bond trading costs by as much as two-thirds in recent years.
## A Bright Future Ahead
Despite concerns about a potential AI bubble, market participants expect automated credit trading to continue to grow, driven by the increasing demand for AI-related investments. While voice trading still plays a critical role, electronic trading is expected to continue to dominate the market, with investors shifting towards more macro-level strategies that use a wider range of instruments. As the market continues to evolve, it will be interesting to see how it adapts to the changing needs of investors and companies alike.
The longer-dated bonds that tech companies and utilities often sell to help fund investments tied to AI can also spur more trading, according to Sam Berberian, global head of credit trading at Citadel Securities, and Jeff Eason, head investment-grade desk analyst at the firm. Prices on these bonds tend to swing more as the yield curve shifts, making the securities more interesting to hedge funds and other investors that trade actively in the market.
As companies borrow more for AI projects, investors are being forced to work harder to make sure they don’t have too much exposure to tech companies and utilities across their portfolios. Heightened concerns about a potential AI bubble are also expected to drive increased hedging activity in the credit default swap market, further boosting trading volumes, according to market makers.
The growth of corporate-bond trading has been driven by a number of factors, including shifts in portfolio trading, which allow investors to buy and sell large blocks of securities in one fell swoop. Traders are adopting innovations long familiar to equities, such as fixed-income exchange-traded funds, electronic execution, and high-speed trading strategies. This has helped to slash corporate-bond trading costs by as much as two-thirds in recent years.
Investors are also shifting towards more macro-level strategies that use a wider range of instruments instead of focusing on single-name, idiosyncratic trades, according to Alex Finston, partner and co-head of US credit trading at Goldman Sachs. These changes have helped to make the market more efficient and accessible to a wider range of investors.
While market participants expect automated credit trading to continue to grow, voice trading still plays a critical role. Grant Nachman, founder and chief investment officer of credit firm Shorecliff Asset Management, says there are limits to how far electronic execution can go — particularly in less liquid parts of the market. Beyond execution, he adds buy-side firms also risk weakening their market standing if they shift too much volume away from voice trading.
Whatever the form, trading was active in 2025, and will probably continue to grow this year. Other related markets, including credit ETFs and credit derivatives, are also seeing more volume. “We expect trading activity to pick up in 2026,” said Citadel Securities’ Berberian.
## A Year of Records
The growth of corporate-bond trading has been marked by a number of records, including the most recent record-breaking level of $50 billion in investment-grade and high-yield bonds traded each day last year. This is a significant increase from the $46 billion traded in 2024, and marks the latest in a string of records for the market.
The growth of corporate-bond trading has been driven by a number of factors, including shifts in portfolio trading, which allow investors to buy and sell large blocks of securities in one fell swoop. Traders are adopting innovations long familiar to equities, such as fixed-income exchange-traded funds, electronic execution, and high-speed trading strategies. This has helped to slash corporate-bond trading costs by as much as two-thirds in recent years.
