Given the recent performance of even the bulge - bracket
corporate bond dealers, every potential money making opportunity needs to be identified and explored.
Not exact matches
In 2006, U.S. - based security brokers and
dealers owned about US$ 400 billion in
corporate and foreign
bonds, according to the Federal Reserve Board.
The firm runs the Honeycomb Network, a platform that lets investors see which
dealer is best placed to make
corporate bond trades happen.
So unlike in the
corporate -
bond model,
dealers don't deal with compressed position limits by widening spreads.
Banks are the
dealers of
corporate bonds, and their willingness to take risks by buying and selling
bonds has been shrinking.
So
dealers are less able to provide immediacy than they used to be, and immediacy in
corporate bonds is more expensive.
Each day these
dealers, on average, trade about $ 700 billion of
bonds (including Treasury, government agency,
corporate, and municipal
bonds) with clients, and billions more in trades among themselves.
In sovereign debt and, to an even greater degree,
corporate bond markets, liquidity hinges in large part on whether specialised
dealers («market - makers») respond to temporary imbalances in supply and demand by stepping in as buyers (or sellers) against trades sought by other market participants.
In Australia, for example, several foreign banks have ceased their market - making in
corporate bond and derivatives markets in recent years and have drawn down their inventories.7 In core markets, such as domestic sovereign
bonds, domestic
dealers are likely to pick up at least part of the slack.
We all know that the massive reduction in
dealer inventories and the cost of capital has had a huge negative impact on liquidity in the
corporate bond market.
For example, when it comes to fixed income instruments, I much prefer buying US denominated
corporate bonds which trade electronically and offer better pricing than Canadian
bonds which trade via Canada's
dealer network and are subject to large markups by the various financial institution.
the Trade Reporting and Compliance Engine (TRACE) is the FINRA - developed vehicle that facilitates the mandatory reporting of over the counter secondary market transactions in eligible fixed income securities; all broker /
dealers who are FINRA member firms have an obligation to report transactions in
corporate bonds to TRACE under an SEC approved set of rules
In
corporate bonds, typically 5 - 7
dealers provide quotes for each CUSIP in contrast to munis which are typically quoted by just one
dealer.
However, despite being listed on exchanges, the vast majority of trading volume in
corporate bonds in most developed markets takes place in decentralized,
dealer - based, over-the-counter markets.
Designed primarily for
dealers or owners of
corporate fleets, self - insurance certification requires extensive documentation and a surety
bond of one million dollars.