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I received the following email, as probably did anyone who has an account at Interactive Brokers. So, those aren't the investors I'm trying to reach, nor am I making any outreach to bond traders who are a different breed and who don't need any help.

Yes, in some circumstances, it is meaningful to distinguish between 'trading' and investing' from the viewpoint of one's intentions. But in terms of their mechanics, there is no meaningful difference. You get in, and you get out. You put on a position, and you take it off. In both cases, you want your executions to be done as cheaply and as efficiently as possible. Therefore, the platform within which choose to execute can matter hugely, and, possibly, the new bond platform IB is rolling out might be of interest to you.

Dear IB Trader,

I am writing to you to announce a major upgrade to the IB Bond Trading platform and to ask you to give it a try as a beta user. As a valued user of the IB bond platform, I hope that you will take an opportunity to try it out and let me know what you think. It's available any time you are!

The IB bond trading system has always allowed you to trade within its own book as well as to trade on a number of away bond platforms by sending marketable orders. In recent weeks IB has upgraded its system so that in addition to being able to place non marketable orders in the IB book it can also represent your non marketable orders at the away platforms. This enhances the liquidity that you can access. But this extra liquidity comes at a cost. Each of the away platforms have their own fee schedule for trades that they execute that depend on whether the order was marketable or non marketable and a number of other factors. Since these fees can vary significantly, IB will unbundle these platform fees from IB's commission. In order to make trading in this environment more transparent IB has developed a number of new tools.

In the new system you will have the option to display bond prices including away platform fees (if any) as the "net" price or to display bond prices excluding away platform fees as the "raw" price. To date all bond prices on the IB system have been raw prices.

In the new system you will have access to market depth information. We have added a Market Depth Trader window for bonds. This window shows the aggregation of the best bid and offer from the IB book as well as from each of the away platforms. This display gives a much broader sense of the state of the market for any bond. You will have the option to display the Market Depth Trader using either net or raw prices.

As will be described in the following material, the net prices are displayed assuming away platform fees will be determined based on your having traded the total size quoted on the platform for resting orders. As such the market data in the Market Depth Trader does not reflect the net price that you will pay for the trade when you take a resting order for a size less than the posted size. In order to make trading more transparent, IB has added a feature in which you can enter the size that you would like to trade and the system will recalculate the net prices based on the away platform fees for a trade of your specified size.

The following materials explain in greater detail
• the new features of the trading platform,
• show you how to use the new displays and
• show you how to get started.


In the original email, the bullet points were hot linked, which my browser won't let me copy. But poking around at IB's website should turn up the info. For those who don't already have an account with IB, let me make a pitch on their behalf. For stocks, bonds, futures, or options, IB's commissions are lower than most, as are their margin rates. But there are monthly data fees and minimum transaction fees that could undermine the commission savings, depending your turnover. Using IB's platform can be intimidating. But it isn't any more complicated than Ameritrade's Strategy Desk or TOS platform, and there are beaucoup third-party apps written to the API.

I have a half dozen brokerage accounts. But I only buy bonds through E*Trade, Zions Direct, or IB, and it is simply a fact of life that they don't quote the same inventory, nor at the same prices. Therefore, all three are needed by anyone who is serious about buying individual bonds.
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