Market participants

Chapter 13 examines the diversity of market participants active in the U.S. Treasury derivatives markets and explains how their differing motivations, strategies, and regulatory frameworks shape the overall market structure. The text details the roles of primary dealers, institutional investors, proprietary trading firms, retail participants, and brokers, highlighting their contributions to liquidity, price discovery, and risk management. Developments such as electronic trading, high-frequency algorithms, and growing global and retail access have transformed traditional roles, intensified competition, and brought new oversight challenges. The chapter emphasizes the importance of technological innovation, regulatory adaptation, and robust risk management practices for all participants. The evolving roles of brokers and interdealer brokers (IDBs) are discussed, demonstrating their continued relevance in facilitating access, liquidity, and operational resilience within a complex and rapidly changing marketplace.