Trading Bonds: Post-Trade price discovery. (part 2 of 2)

but as welcome back uh.

was just cutoff thereby my recording serviceuh.

atomax ten minutes here so host describing uh.

off marked red ninety six five sevenseven one oh um.

quickly got a little better for discounthouses telling on funny guys about how eunicemaybe brendan family trade um.

of the underwriter so and parallel to do that really no big deal we want to look at his too so we understand what's going onhere we've got the initial discount theunderwriter discount we've got the initial offering price we see continuity of pricing while the underwriter stays uh.

in syndicate so if there were other dealers in herethey were coordinate their efforts to maintain the continuity of pricing while theywere technically quote-unquote in syndicate if we go another page forward k so here we see the protocol the new and we see another couple of discounts here here is where things changed so all these you can see customer bought here we see the inner dealer tradetogether other other dealers that are accessing the underwriter their trainingfrom dealer dealer uh.

a million bonds moved from onedealer to the next and they purchased it and discount there so this issue would be said to have brokensyndicate at this point um.

these extra couple transit ninetiesbuddy five four were probably not likely to see uh.

that exact pricing again uh.

right away so now we're going tospread start to move uh.

and some disparity there that we cantalk about so shes ubuntu report button on the poor itworked out in part customer bought that nineteen ninetyfive seventeen mind you this is on the ten at two forty two and just an hour earlier someone else pot nor the retail customerbought the bond for little cheaper so and the difference there that bsinvestors purchased in the new issue alert period and these guys purchase technicallyuh.

on the secondary we see another inner dealer trade for forty five bonds was you know if you consider but for twelvemonths okay look look at this this is interesting because doesn't look like here it is a a restless as principal transaction this dealer reaches out to either this deal that brought here orthe initial underwriting dealer and they buy forty-five bonds at ninety eight they do that so that they do that on thetampa at three oh five pm okay when this dealer went to the market topick up these bonds already had an order in hand to sellthese bonds to a customer at one hundred so this customer about forty five on thepark and the dealer bob forty-five bond at ninetyeight at twenty dollars per bond at forty-five bonds at nine hundred dollars and those dealer never had the inventorythe bonds may simply called up there buddy uh.

either this dealer this dealer or the initial underwriter and said hey and give mean forty five months at ninety eight uh.

So if some portable ninety eight a broker called it a little closer theyneed engine buddies bond's home and he sells until now part of their new issuei can some fear par and the customer obliges whereby the bond that part and nine hundred bucks is made and dickcustomer gets bones well that's fine uh.

implying enough you're okay with paying twenty bucks foryour bonds when you know that someone else's buying them odd lot 'em of the exact same bond at about the exact same time winningthree minutes apart 'em but they're paying and eight bucks last so it eight dollars times forty five yreight dollars times ten makes a difference to your wallet in yourretirement picture then then you should care then you should definitely at leastunderstand another so that you can identify it how you're being treated buyer broker replies ur or discount brokerage firm important to know and a lot of folksdon't know so let's keep a look at this for peoplein finding out well spent too much time on this you know one of the twelfth and d's reports come in reverse chronologicalorder or most recent data first expo had to go all the way back to thebeginning they're smart and trade for seem more ina dealer tray that ninety eight so somebody holding one of the dealersis holding these out to other dealers at a price of ninety eight and it looks like customers are marking up or delivermarking back up to around par and actual click this guy a marked up nineteen dollars insixty cents they probably did that just to stayunder this mark so if his client was sadly enough to usethis website he could say i catch a under par you're not the high-water mark because no matter how many times it's fair i read till investor does not want to bethis guy if he's the only one there are a bunchof them men that's ok but you don't wanna find out near the onlykind it's paying the highest price for security and when you find that out getpretty upset here at three thirty on a trend we see in inner dealer looks like a riskwas when the customer buys the exact same time as two thousand dollars that somebodymade for a phone call or by clicking a button as a secondary trade this wasn't a newissue arm so we can see it g_ graham has made right here twenty bucks a month custer about a hundred bonds and theypay par dealer but ninety eight there you have it again this is the timeof or emis rb and down these are only either post rate prices so it still leaves you in the dark but if you can look it yesterday and you cansee a two point spread and inner dealers at ninety eight been you know that at least as late as yesterday that the broker arrived here that you may betalking to could have probably afterthought marketninety eight and it may give you some leverage to sayi don't want to be the guy that spanned two points the pam part want to you that back a couple bucks so if you know you can pointed out ifyou can pointed out then you've got a better chance ofimproving the price that you receive so uh.

algo en route this up here thiswas uh.

understanding bond trading looking atm_s_ or be an emal and hopefully uh.

l two guys out.

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Trading Bonds: Post-Trade price discovery. (part 2 of 2)

Part 2 enjoy.