My conscience finally prompted me to do what I should have done long ago, and I sold my Monsanto bonds. (In fact, I never should never have bought them in the first place, given how evil the company is. But that's a discussion for a different post.)Anyhow, they got themselves into trouble about a year ago, and their bonds became discounted. So I opened a minimalist position of two in May '18. By Aug, prices on their debt had dropped further, so I added another two of a different maturity. Predictably, I was early, and prices dropped even further. But rather than average down further, I sat tight, not wanting to increase my position in what I knew was a morally questionable investment, never mind its financial risks. Recent news hasn't been good for the company, and all markets (stocks, bonds, commodities) are skating on the thin ice of Powell's insane pledge to bailout the banks, once again. So, it has become time to sell what should be sold. One position was held at IB. So I hit the bid and was out, with a YTS (Yield to Sell) gain of 15.8% for a 1.3 year holding-period. The other --and first-- position was held at Fido, and I dreaded dealing with their customary email messaging system and soliciting of bids. But to my surprise, I was able to use the book to find a bid that matched my position size and got an immediate fill, for a YTS gain of 6.9% for a 1.6 year holding-period. What to do with the cash? Who knows? But I'm relieved to be out of Monsanto and on the sidelines. Secondly, Fidelity is becoming a better and better shop to deal with for bonds. Of the discounters (Schwab, ET, TD, etc.), my favorite is still IB. But Fido is beginning to match their ease of execution and should be preferred by smaller accounts if they aren't also trying to do crazy stuff like trade equity index futures intra-day (which will become a necessity when markets finally do crash). Arindam
..Fido, and I dreaded dealing with their customary email messaging system and soliciting of bids.Would you have time to explain a little how this works?Thanks.
Nick, Up until recently, if you wanted to sell bonds through any of the discounters (Schwab, Fido, ETrade, TD, etc.), you'd write your order and submit it. Several minutes later --never immediately-- you'd see a comment appended to your order saying, "Order rec'd" with a time stamp. Again, several minutes later, you'd get another message saying, "Soliciting bids. Will show at such and such time," which was generally ten minutes later. When that time came --sometimes sooner, and sometimes not at all-- you'd get another message saying something like, "Received 3 bids and 1 pass." The message would state what the best bid was and ask if you wanted to accept it and that you had 3-5 minutes to reply.If you chose to accept the bid, you'd --in effect--rewrite your order and submit it. Several minutes later, you might get an acknowledgement that the new order was received or you might get a report that the order was filled. In short, the process was slow, tedious, and entirely unnecessary, because at IB you could write an order and it'd be sent to their national network. If your position-size met that currently prevailing, it was shown as NBNO and often you got an immediate execution. Otherwise, you'd get a message advising you to lower your price or to increase your size. If you ignored that, your order would still be sent -- to where, I don't know-- but often enough, sometime later, you'd get a fill, or not and your order would expire at EOD. This morning, at Fido, I ran into the same position-sizing constraints. To be able to hit the best bid required a lot of 5, but I had only 2. However, by pulling the book, I could see that some desk somewhere would buy just two if I'd drop my price to match theirs. Since the diff between their price and the highest bid was just a couple of pennies-- and I wanted out-- I didn't screw around with counter-offers but accepted their price. In the email messaging system, selling a lot of bonds could take half an hour. At Fido this morning, I was out in under a minute. Click; click; click. Done. Kudos to them for streamlining their process. Arindam
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