No. of Recommendations: 5
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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