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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RELATED FAQS
  1. What is the quickest, easiest and cheapest way to buy a bond?

    Bonds usually can be purchased from a bond broker through full service or discount brokerage channels, similar to the way ... Read Answer >>
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    There are certain times when a broker must purchase the stock that you are selling. For example, if the broker is a market ... Read Answer >>
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    If you decide that you have the knowledge and experience to take on stock investing, or if you feel you would like to give ... Read Answer >>
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