Q&A: Bringing color to CLO BWICs with Live Feedback

In our latest Q&A, Howard Cohen, our Head of Markets, and Vitaliy Kozak, our Head of Insights break down how Live Feedback transforms the BWIC experience.

What inspired the introduction of Live Feedback into Octaura’s CLO BWIC trading protocol?

HC:

As we expanded our CLO workflows, one thing became clear: clients were bidding in the dark. In the traditional BWIC workflow, they’d submit a bid, wait…and hope. They rarely knew where they stood in the stack until it was too late. And because the process sits across multiple intermediaries, the color they received often represented one dealer’s view out of 30. One of the cool things about being at Octaura, is that as a start-up, we can grow and evolve with our client feedback. It is critical for us to be as close to the client and client outcomes as possible.

Once we recognized  these shortcomings with workflows, we knew Live Feedback would solve that. It gives bidders explicit visibility into where they stand — best, covered, or far from it — in real time. Clients told us this was their biggest pain point and addressing it removes a huge amount of market opaqueness. Now, instead of hearing after the fact that they never really had a shot, they can actively improve their bids and save time doing it.

VK:
For me, this goes back more than a decade, when I was still trading CLOs at a large bank. . The process was painfully manual — Excel, phones, endless back‑and‑forth. As a senior trader, I spent 60–70% of my day servicing BWICs and barely made money on them.

The real kicker was that just getting bid feedback required a four‑step relay between bidder → salesperson → trader → seller. And the whole chain had to reverse to send the answer back. One question could generate ten conversations involving very senior and very busy people. The whole process is extremely complex, which is why no one has evolved it or tackled creating a better solution before Octaura, and which is why it has taken years of development to launch.

Live Feedback eliminates all of that. It automates the communication loop, so everyone sees the same information simultaneously, and can make  the whole BWIC process execute in around 15 minutes.

How does Live Feedback align with Octaura’s mission to modernize CLO markets?

HC:
We build for transparency, efficiency, and client outcomes at Octaura, and Live Feedback strikes at the heart of all three. Historically, bidders only saw color from a single dealer; now they see the entire stack. Sellers no longer spend time distributing updates to dozens of dealers; Octaura handles that automatically. This gives so much less friction and more clarity around what’s driving price — and ultimately, better‑executed trades.

VK:
The CLO market has grown more than 3x over 15 years and now stands at $1.2T ¹— but liquidity hasn’t kept up. Secondary trading is 5x lower than loans and 10x lower than high yield. That’s not a healthy structure.

In my personal experience as a trader, roughly 45% of secondary CLO trades go through BWICs, and BWICs take too long. By cutting the process from ~90 minutes to as little as 15, Live Feedback gives time back to traders and removes a major bottleneck preventing the market from scaling.

For traders, how does real‑time feedback change execution? What advantages does it provide over manual or legacy electronic workflows?

HC:
Before Live Feedback, traders spent their entire day bidding, waiting, and guessing. You never truly knew if the color you got was complete or timely. Now, Octaura gives a full, high‑resolution picture of each BWIC as it unfolds.

And for the moments in the workflow that matter most, like getting topped in the final seconds, we’ve introduced a jump‑ball mechanism. It gives bidders one last chance to compete and win the bonds they care about.

VK:
On the sell side, this is just as transformative. Dealers no longer burn cycles relaying messages between stakeholders. Everyone sees the same information at the same time, which means traders finally get to focus on higher‑value activities instead of message‑passing. It’s efficiency that has real impact.

How does Live Feedback bring Octaura Markets and Octaura Insights together?

HC:
CLOs are opaque, and in opaque markets, traders spend huge amounts of time calling around for color that may or may not be accurate. Octaura fuses Markets and Insights to replace that guesswork with real context.

Users don’t just see a price — they see what’s driving that price: number of bids, where they sit in the stack, demand signals, and liquidity indicators. It’s actionable intelligence delivered right inside the trading workflow.

VK:
That is a great question. CLOs are derivatives of the loan market, which is already complex. To trade them well, you need data — lots of it. But historically that required expensive, disjointed vendor systems that, based on my experience, could cost a firm $400–500K just to get started.

Our goal is to integrate analytics directly into trading: live pricing, tranche‑level detail, liquidity scores, and historical context, all on the same screen where you execute. When data and trading live together, the market becomes more accessible and significantly more efficient.

How do you see Live Feedback shaping the future of electronic CLO trading?

HC:
Live Feedback is just the beginning — the “tip of the iceberg.” Just like we did in loans, we’ll keep iterating based on real client needs. Some want top‑three protocols, others want alternative workflows. Our job is to stay close, listen, and evolve the platform so it always moves markets forward.

VK:
This market has an obvious imbalance: it’s relatively easy to sell CLO risk, but almost impossible to source it in secondary. That’s why I believe primary issuance is so large, at over $1.2T¹

Our success metric is simple: secondary volume needs to grow. If protocols like Live Feedback help take the market from an estimated $180B a year to $200B, $300B, $500B — that means electronification is finally unlocking the liquidity this asset class deserves.

What’s next?

HC:
VK, after Live Feedback and our upcoming Insights expansions, what’s on the horizon?

VK:
The way I see it there are two major tracks:

For Data & Analytics, we want to continue expanding live pricing for CLOs, enhancing liquidity scores, and automating price/yield tables

For new trading protocols, clients are excited about trading on characteristics — essentially a portfolio‑style workflow that lets managers source large lists (say, $300M of BBBs) in a single day, not three weeks.

If Live Feedback gives traders time back, the next phase solves the bigger structural problem: sourcing risk efficiently in secondary. That’s what will truly transform how this market trades.

1. https://www.ellingtoncredit.com/investment-strategy/why-CLOs/#:~:text=Global%20CLO%20market%20has%20nearly,equity%20in%20the%20secondary%20market.