How To Analyze Corporate Bonds With Bloomberg Terminals: Trading Bonds On Bloomberg
The Bloomberg system allows users to electronically trade bonds with each other but to do so requires users to have counterparty clearing agreements and these may be difficult or impossible to establish for an individual investor. However, even if you don't actually use Bloomberg to execute orders, you'll still find the system helpful with the other stages of the trade process.
How To Analyze Corporate Bonds With Bloomberg Terminals: Conclusion
In addition to the tools Bloomberg offers for analyzing, valuing, and comparing corporate bonds, the system also provides many functions for monitoring bond prices. Each user has their own unique preferences for which market monitor they prefer, but one common screen is accessed by typing <PX1> into the terminal. This screen provides constant updates on the Treasury bond market, which ultimately drives movements across all segments of the bond market. You can also use this screen when purchasing bonds on a "spread" basis in order to assure that the Treasury yield your corporate bonds are being priced off of is accurate.
Bloomberg can also be used to manage a portfolio of corporate bonds (as well as other investments.) The portfolio management functions can be accessed by typing <PORT> into the terminal. You can build a portfolio by entering your holdings into the system and Bloomberg will continuously update your portfolio by supplying indicative market prices for each of the bonds that you own. Alternatively, you can input your own "market prices" into the system. Either way, you'll have an ongoing record of your profit and loss (P&L) for each individual position, as well as for the portfolio as a whole.
The system also offers a variety of reports for analyzing your portfolio. For example, you can use Bloomberg to view your portfolio by industry or geographic concentration in order to ascertain whether or not you're properly diversified. You can also run cash flow reports to see when you will receive principal and interest payments from your bond portfolio.