No. of Recommendations: 0

The problem you're experiencing has a one-word explanation: MARKETABLIITY. No bond broker will tell you anything different than what TDs bond jocks told you. To repeat: Small lots aren't marketable.

You want to sell 3 (three) bonds? Ho, ho, ha, ha, hee, hee. Lots of luck getting a price close to the current bid, if you even get a bid on that position at all.

Now go back and do some honest thinking. Why did you buy just three bonds? Because, back then, the market was going crazy, and it wasn't obvious that a bottom had formed, just as it isn't obviously right now that the market can't roll over again. Three bonds was a prudently-sized position, no matter how much money was in the account.

Yes, it might be effective to flip them for cap gains instead of holding to maturity. But you picked the wrong vehicle. You should have bought the common. Stocks or bonds, in both case you're making the same bet, that the underlying won't die. But you can flip small lots of stocks easily at the current bid. But a bid for bond has to be solicited, and bidders suspect either that you're desperate to sell or they know they'll have a hard time finding another sucker (er, buyer).

Why a central clearing house hasn't developed whereby sellers could execute "cross-trades" with buyers is beyond me. Certainly, any broker has the in-house capabilities to execute such trades. Customer A has three bonds to sell. Customer B would like to buy those three bonds.

There are lots of reasons to avoid AmeriTrade for buying bonds. But their up-front inability to get you a better price than anyone would get certainly isn't one of them. Suck it up and figure out a PlanB, like holding to maturity.
Print the post  


When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.