Bond Broker

AAA

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Bond Power

    A separate legal form that authorizes the transfer of ownership ...
  2. Junk Bond

    A colloquial term for a high-yield or non-investment grade bond. ...
  3. Bond Rating

    A grade given to bonds that indicates their credit quality. Private ...
  4. Bond

    A debt investment in which an investor loans money to an entity ...
  5. Municipal Bond

    A debt security issued by a state, municipality or county to ...
  6. Treasury Bond - T-Bond

    A marketable, fixed-interest U.S. government debt security with ...
Related Articles
  1. The Advantages Of Bonds
    Investing

    The Advantages Of Bonds

  2. Introduction To Investment Diversification
    Investing Basics

    Introduction To Investment Diversification

  3. Advanced Bond Concepts
    Bonds & Fixed Income

    Advanced Bond Concepts

  4. Bond Basics Tutorial
    Retirement

    Bond Basics Tutorial

Hot Definitions
  1. Halloween Strategy

    An investment technique in which an investor sells stocks before May 1 and refrains from reinvesting in the stock market ...
  2. Halloween Massacre

    Canada's decision to tax all income trusts domiciled in Canada. In October 2006, Canada's minister of finance, Jim Flaherty, ...
  3. Zombies

    Companies that continue to operate even though they are insolvent or near bankruptcy. Zombies often become casualties to ...
  4. Witching Hour

    The last hour of stock trading between 3pm (when the bond market closes) and 4pm EST. Witching hour is typically controlled ...
  5. October Effect

    The theory that stocks tend to decline during the month of October. The October effect is considered mainly to be a psychological ...
  6. Repurchase Agreement - Repo

    A form of short-term borrowing for dealers in government securities.
Trading Center