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.

RELATED TERMS
  1. Give Up

    A procedure in securities or commodities trading where the executing ...
  2. Carrying Broker

    A commodities or securities broker who provides back office functions ...
  3. Forex Broker

    Firms that provide currency traders with access to a trading ...
  4. Executing Broker

    The broker or dealer that finalizes and processes an order on ...
  5. Discount Broker

    A stockbroker who carries out buy and sell orders at a reduced ...
  6. Deep Discount Broker

    An agent that mediates sales and exchanges between securities ...
Related Articles
  1. Trading

    Is Your Forex Broker A Scam?

    While the forex market is slowly becoming more regulated, there are many unscrupulous brokers who should not be in business.
  2. Trading

    How Forex Brokers Make Money

    Forex brokers set their prices based on commission, spread, or a combination of both. Traders have to be cautious in the thinly regulated forex market.
  3. Trading

    Brokers and Online Trading

    How do you find the right broker for your investment needs? Start by reading our broker tutorial.
  4. Trading

    The Best Low-Cost, Web-Based Trading Brokers

    With this table, investors can differentiate between top low-cost, web-based trading brokers by price, capabilities, and offerings.
  5. Investing

    What Does a Broker Do?

    In the investment world, broker is a term used to refer to an individual or entity that helps facilitate trading in financial securities.
  6. Investing

    Bond Buyers: Is Your Broker Overcharging You?

    Retail investors are at a disadvantage when it comes to buying bonds, because brokers don't have to disclose everything. That’s expected to change soon.
  7. Financial Advisor

    Is Your Broker Acting In Your Best Interest?

    Learn the clues you'll need to determine whether you've chosen a reputable professional.
  8. Investing

    Corporate Bond Basics: Learn to Invest

    Understand the basics of corporate bonds to increase your chances of positive returns.
  9. Trading

    Price Shading In The Forex Markets

    This practice puts brokers ahead of their clients, but it doesn't have to be a negative for traders.
  10. Investing

    The 4 Biggest Bond Myths

    Bonds can be a great addition to a portfolio but be aware of these four myths.
RELATED FAQS
  1. Does a broker always have to buy a stock if I want to sell it?

    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 >>
  2. What does "in street name" mean, and why are securities held this way?

    In almost every instance when you buy or sell securities with a broker, your name is not actually on the stock or bond certificate. ... Read Answer >>
  3. What determines the price of a bond in the open market?

    Learn more about some of the factors that influence the valuation of bonds on the open market, and why bond prices and yields ... Read Answer >>
  4. My broker just sold securities out of my account without my permission. Is this legal?

    Your broker's actions are not legal unless he or she sold the securities under certain conditions. Let's look at the two ... Read Answer >>
Hot Definitions
  1. Debt/Equity Ratio

    Debt/Equity Ratio is debt ratio used to measure a company's financial leverage or a debt ratio used to measure an individual ...
  2. Two And Twenty

    A type of compensation structure that hedge fund managers typically employ in which part of compensation is performance based. ...
  3. Life Insurance

    A protection against the loss of income that would result if the insured passed away. The named beneficiary receives the ...
  4. Price Elasticity Of Demand

    A measure of the relationship between a change in the quantity demanded of a particular good and a change in its price. Price ...
  5. Market Capitalization

    The total dollar market value of all of a company's outstanding shares. Market capitalization is calculated by multiplying ...
  6. Frexit

    Frexit – short for "French exit" – is a French spinoff of the term Brexit, which emerged when the United Kingdom voted to ...
Trading Center