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URL:  http://boards.fool.com/okay-i-understand-that-there-isnt-a-wide-market-17284907.aspx

Subject:  Re: Purchasing Bonds Date:  5/29/2002  11:56 AM
Author:  imcharliehm Number:  3792 of 35400

Okay, I understand that there isn't a wide market for bonds like there are for stocks. That's kinda crazy, but then the variations in types of bonds and special features etc would make it harder to operate the market openly.

Nice try, reikiman, but no cigar. Open and deep markets are a function of demand, not the intricacies of what is traded. As presently constituted, the bond market serves its primary constituents, which aren't retail investors. In dollars traded, debt markets are five times bigger than equity markets. But in terms of the number of participants, way smaller. It's a private club and they want to keep us riff-raff out, with the Treasury market being the lone exception.

Anyway, I find it interesting that Yahoo has an excellent bond finder page, which has some small correlation with E*Trade's bond finder page. So if there's no regular open market for bonds, then what's Yahoo tapping into for it's data? Are they going to a specific broker and getting data from them?

For $50/month, anyone can see the specialist's book and the depth of orders on the NYSE. For free or cheap, you can see the order books of ECN's/market makers, etc. for the NAZ (aka, Level II quotes). For bonds, you're lucky to see half the inside price, just the offer, almost never the bid, and certainly no depth, nor even a report of volume traded in the issue that day if it's not a listed issue.

Get involved with the bond market on a daily basis and you'll find out how blindfolded you are trading as a small retail investor compared to the huge amount of info available to stock guys.

Charlie

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