Brokers/dealers

A sensible question arises How do you know whether a spread duration for a fixed-rate bond is a spread based on the nominal spread, zero-volatility spread, or the OAS The simple answer is you do not know You must ask the broker/dealer or vendor of the analytical system. To add further to the confusion surrounding spread duration, consider the term OAS duration that is referred to by some market participants. What does it mean On the one hand, it could mean simply the spread duration that we just described. On the other hand, many market participants use the term OAS duration interchangeably with the term effective duration. Once again, the only way to know what OAS is measuring is to ask the broker/dealer or vendor. 

A separate category of LSE broker is the broker/dealer. These are firms that act both for their own account or as agents for another party. Broker/dealers therefore trade with both market makers and client firms and can deal with clients either as principal or agent. Broker/dealers may also act as wholesale broker/dealers to GEMMs. 

Many customers are able to give advice on production, but dealers in particular are best placed to advise. To enable contact with such dealers, it is worthwhile attending international meetings such as the International Federation of Essential Oils and Aroma Trades (IFEAT) annual conference or reading the Perfumer and Flavorist magazine, which gives full details of brokers, dealers, and essential oil suppliers. There is no reference site that is 100% reliable in pricing for essential... 

For example, a major full-service broker/dealer offering online execution from its own inventory of municipals would list just two New York tax-exempt issues available for purchase online. This went against the preferences of the traditional bond investor, who is looking for diversification, as well as the preferences of the online investor, who seeks convenience, efficiency, and lower costs. 

ValuBond are owned by Cantor Fitzgerald and Charles Schwab, respectively, along with other private investors. Without going into the specific characteristics of each, all three allow participating broker/dealers to offer execution capabilities to traders, liaison traders, registered representatives, private clients, and correspondent broker networks. 

Treasury Direct System operated through Federal Reserve Banks in which retail investors can buy Treasuries without paying a fee to a broker/dealer. 

Johnson Kwak, 15 Bankers, 81,108,158 Morris, Meltdown, 60,69, 74 Engel McCoy, Blind Eye, 2065 Immergluck, Private Risk, 462 Congressional Oversight Panel, Special Report, 4 Schwartz Creswell, What Created This Monster (Buffet quote). Securities and Exchange Commission, Alternative Net Capital Requirements for Broker-Dealers That Are Part of Consolidated Supervised Entities Final Rule, 69 Fed. Red. 34,428 (2004) McCoy, Pavlov Wachter, Systemic Risk, 1358-60 Joseph Stigletz, Capitalist Fools, Vanity Fair, January, 2009, at 50 Stephen Labaton, Agency s 04 Rule Let Banks Pile up New Debt, NYT, October 5, 2008, at Ai. 

We got around this difficulty by proposing that the United States Treasury act as a sort of savings broker for the dollar exchange. We would license the trades if they let us place the dollars in "blocked" accounts in United States banks. Then after the war the accounts would be released. Most of the foreign-currency dealers had agreed to this arrangement. 

Brokers These are intermediaries, such as retail stores, car dealers, pharmacists, and travel agents. Brokers make products and services accessible to end users, and also transmit customer expectations to the solution provider to improve the value of the solution. 

Market professionals include the banks and specialist financial intermediaries mentioned above, firms that one would not automatically classify as investors, although they will also have an investment objective. Their time horizon will range from one day to the very long term. They include the proprietary trading desks of investment banks, as well as bond market makers in securities houses and banks who are providing a service to their customers. Proprietary traders will actively position themselves in the market in order to gain trading profit, for example, in response to their view on where they think interest rate levels are headed. These participants will trade direct with other market professionals and investors, or via brokers. Market makers or traders (also called dealers in the United States) are wholesalers in the bond markets they make two-way prices in selected bonds. Firms will not necessarily be active market makers in all types of bonds smaller firms often specialise in certain sectors. 

Intermediaries trade either with customers or with each other. In the latter case, trading is conducted via interdealer brokers (IDEs). Like all brokers, they match up buyers and sellers, but do not take positions themselves. They provide a useful service by allowing intermediaries to adjust their positions without revealing them to other professionals. In the absence of a centralized exchange, IDEs provide dealers with market color around flows of securities. Related to this, they also provide information to allow dealers to price less liquid bonds. 

In both markets, dealers will bid for most securities in most cases. In the United States this is often done through bid lists. Big institutional investors send a selected group of dealers lists of securities on which the dealers are invited to bid. The timeframe for this bid wanted in comp (i.e., competition) approach is short—usually a few hours. Each dealer is then notified of the securities for which they are the highest bidder. For less liquid bonds, it is also common for dealers to work an order. Under this approach, an investor leaves an order with a dealer to buy or sell a set amount of securities within a spread range. The dealer then has a limited amount of time (usually one or two days) to source the bonds. In working an order, a dealer is functioning more like a broker. 

Intermediaries are usually reluctant to offer securities if they do not have them in inventory. Exceptions are highly liquid issues, where the dealer is confident he can obtain the bonds via the interdealer broker market. Generally, Eurobond dealers are more willing than their US counterparts to make short offerings, that is, to sell bonds they do not have in inventory. This mostly reflects the more competitive nature of the market—there are more dealers with smaller market shares than in the United States. But with the market s increased volatility short offerings are less common, and the US-style order system is becoming more prevalent. 

Access to gilt inter-dealer broker (IDB) screens. 

The second way in which a securities firm or commercial bank can get an institutional investor into a swap position is by taking the other side of the swap. This means that the securities firm or the commercial bank is a dealer rather than a broker in the transaction. Acting as a dealer, the securities firm or the commercial bank must hedge its swap position in the same way that it hedges its position in other securities. Also it means that the swap dealer is the counterparty to the transaction. 

The retail sector means the sale without transformation of both new and used goods to the general public for personal consumption or use by a particular household. This trade also includes being a broker or dealer, gas stations, and consumer cooperatives. 

Fibre Market News (Targets paperstock dealers/packers, brokers, material recovery facilities, paper and paperboard mills, commercial generators and local, state and federal agencies)... 

Since there is no central U.S. Bond Exchange where brokers can go to obtain a bond on behalf of an individual investor, individual investors must buy smaller bond quantities (less than 1—5 million) from dealers. 

Dealers, often brokerage firms with large retail investor customer bases, purchase bonds in the wholesale or institutional marketplace in bulk. Once acquired, the large bond position must be subdivided and sold to numerous investors. If not all of the bonds can be sold immediately, the broker will hold the bonds in inventory until the position is completely liquidated. The dealer can inventory the bonds anywhere from a day to a few months, and this is the reason that retail bond spreads tend to be large. There is always the risk that the broker may have to hold the bonds in inventory for an extended period of time— hence, a large spread is typically "built" into the price. 

These inventory systems provide dealers and online brokers, whose online presence may be negligible or nonexistent, a ready-made, cost-effective system for offering bonds online. Full -service dealers can also deploy the commingled system... 

More important, all three allow participating dealers to private-label the system so that the individual investor gets a searchable database of bonds as well as real-time execution in a seamless environment. In other words, you have no idea where the selection of bonds comes from or how your trade gets executed— but it s all done perfectly within the confines of your online broker s web site. And you know you are getting the best selection at the best price. 

Interdealer systems allow dealers electronically to execute transactions with other dealers through the fully anonymous services of brokers brokers. A number of interdealer brokers have introduced or plan to introduce electronic transaction systems that will allow dealers anonymously to execute transactions in securities through proprietary net-... 

When buying individual bonds, stick with new issues when possible. New issues are the best bet. Older bonds are more dicey, include a dealer s markup. These markups are often excessive and you will never know what spread you are paying unless you ask—and if your broker is willing to tell you. 

PIq 2 Flow diagram for aluminum in the United States, showing the role of recycling in the industry. Scrap recycling (lower left) includes scrap collectors, processors, dealers and brokers, sweat furnace operators, and dross reclaimers. 

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