DEFINITION of 'Bond Broker'

A broker who executes over-the-counter bond trades between institutional investors (bond traders). Bond brokers act as an intermediary between institutional investors to keep the identities of the other parties anonymous. Brokers communicate with traders on telephone and over the internet to obtain quotes from both parties.

BREAKING DOWN 'Bond Broker'

Though bond brokers play a key role in maintaining the anonymity of buyers and sellers in the bond market, as computer systems advance, some of these duties will become obsolete. As for now, human interaction still plays an important role. Bond brokers make money off the spread at which they exchange bonds between traders, and take little risk in the process, since brokers do not hold long or short positions in bonds.

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