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The secondary bond market includes transactions (buy and sell) of bonds that have already been traded as part of a new issue offering. The secondary market covers the complete range of fixed income security types.
The offerings of the secondary market vary in liquidity, ranging from U.S. Treasuries, where transactions are frequent, sums are large, and bid/ask spreads tend to be thin, to markets such as the municipal bond market or the mortgage-backed security market, where a multitude of different offerings of smaller denominations tend to make these markets significantly less liquid.
To search for individual fixed income offerings in the secondary market available through Fidelity, navigate to the Research tab > Fixed Income & Bonds. There are multiple ways to search for secondary market offerings. You can:
Use this section to focus your bond search. Search criteria are in dropdown menu or slider format, allowing you to make your selection without having to leave the search results page. For Maturity Date, you can either type the date in MM/YYYY format, or click the calendar and select month and year. For Ask Yield, the default is All, but you can move the gray arrows along the blue slider to change the default value range. The default value range is defined by the bond or CD offerings available at the time of your search. Note: the criteria types in this section differ depending on which bond type you're searching for.
You can select values for the search criteria in this section in two ways: you can overwrite the default values in the Min and Max fields, or you can move the gray arrows along the blue slider to change the default values. Please note your entries must be in numerical format and you will not be able to enter values outside the default range.
The dropdown menus under Call & Redemption Features default to All. You can change these selections by clicking into each dropdown menu and choosing a different option.
The dropdown menus under Other Features default to All. You can change this selection by clicking into each dropdown menu and choosing a different option.
Learn more about Income Source, Use of Proceeds, Subject to Alternative Minimum Tax, Exempt From Federal Tax, Escrowed to Maturity, Insured, Bank Qualified, Sector, Survivor's Option, Foreign Sovereign Debt, and Puttable.
Fidelity's fixed income inventory is composed of offerings from Fidelity Capital Markets, and various third-party providers. Many of these securities can be viewed and traded online. Note that Fidelity's inventory will generally represent a subset of the universe of outstanding securities of a given bond type.
Fidelity may get bonds directly from national and regional broker dealers or use national and regional broker dealers that are affiliated with the BondDesk, KCG BondPoint or the MuniCenter offering platforms.(See What is a fixed income ATS?)
A fixed income Alternative Trading System (or ATS) is an electronic marketplace that aggregates securities, bringing the offerings of multiple bond dealers together in a single marketplace.
Fidelity uses three of the largest Alternative Trading Systems: BondDesk, KCG BondPoint, and the MuniCenter. Through them, you have access to over 300 participants that contribute and/or distribute fixed income securities.
By partnering with these three ATSs, Fidelity is able to offer you a broad variety of fixed income inventory. Contributors to the inventory include securities firms such as UBS, Credit Suisse Group, Bank of America, N.A., and A.G. Edwards & Sons, Inc. Fidelity is also a contributor of inventory to these offering platforms.
By pooling inventory in this way, fixed income ATSs assist in creating a more electronically enabled, centralized marketplace for fixed income securities.
The Graph View illustrates your search results plotted along benchmark yield curves. The Table View displays your results in a sortable list. Many customers choose to narrow their choices through the Graph View, and then obtain more information about the bonds they are interested in from the Table View.
The Graph View illustrates your results plotted by maturity and yield on as many as five benchmark yield curves.
Yield curves shown are interpolated curves based on previously reported third-party evaluated prices and yields. They are based on a cross-section of bonds applicable for a stated credit quality and are not limited to the bonds that a user selects as part of a search. The yield curves are presented for informational purposes only. Fidelity makes no guarantee that the yield curves supplied are accurate, complete, or timely, and does not provide any warranties regarding results obtained from their use.
The Table View displays all the bonds that meet your criteria. In some cases this could be hundreds or thousands of bonds. To narrow your search or learn more, you can:
Note: Bond attribute and analytics information are provided for informational and/or educational purposes and are not intended to provide tax, legal, or investment advice and should not be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any security by Fidelity or any provider. Neither Fidelity nor any supplier of market data guarantees the timeliness, sequence, accuracy, or completeness of market data or any other market information, or messages disseminated by any party.
Fidelity provides three tools that can help:
You can access Portfolio Review from the Research tab > Fixed Income > Build or Review Your Fixed Income Portfolio. Fixed Income Analysis is located under Accounts & Trade > Analysis (you must be logged in).
From the Bond Details page for corporate municipal and agency/GSE bonds, the Price & Performance tab displays the most recent reported trade as Recent Trade (under Basic Analytics), and provides a link to View Recent Trades. Clicking on this link will open a pop-up window to display up to 20 of the most recent trades, with the time, price, and size/quantity of each trade.
The trades listed are trades that have occurred across the U.S. bond markets, not just Fidelity's most recent trades or the trades of Fidelity's customers. All dealers are required to report this information to self-regulatory organizations (the Financial Industry Regulatory Authority or FINRA for corporate and agency/GSE bonds, the Municipal Securities Rulemaking Board or MSRB for municipal bonds). The information is in the public domain and Fidelity provides a real-time display of this data as a service to you.
Trade Reporting Compliance Engine, or TRACE, is owned and maintained by FINRA to track trading activity in U.S. corporate bonds and agency/GSE bonds. The Municipal Securities Rulemaking Board, or MSRB, is responsible for making the rules that regulate the dealers of municipal bonds, municipal notes, and other municipal securities.
Each bond on the Search Results Table View has a Buy link and a Sell link next to it. Each of these will take you to the Trade screen. Some of the offerings will include a book symbol in the Depth of Book column. Depth of Book provides a display of additional bids and offers in a given security in addition to the best bid and offer price. It allows you to assess the liquidity of a given bond or help you buy a larger quantity. It may be beneficial to review prior to initiating a trade.
You can also:
Note: To sell fixed income securities, you can also call a Fidelity representative at 800-544-6666. Sell orders may be performed online where a bid price and yield are indicated in the Search Results table.