Yield Profiles - LP Markout Analysis
Yield profiles plotted for an external LP, like yield profiles for counterparties are useful identifiers for the quality of flow accepted by an LP.
They are also viewed from the house perspective so a positive profile is also positive for the house. As they are viewed from house perspective we would expect to see a negative inception yield at 0 as this is spread paid to an external LP.
Yield profiles are a useful tool for analysing the reliability and quality of service an LP provides your company. This in turn can help guide decisions made in hedging, execution, distribution and price formation.
We are able to view the cancel ratio, spreads received and last look parameters applied to any flow sent to an LP.