Are Corporate Bonds Sold on the Stock Market?
Stocks are traded in the stock market, but so are bonds, even though many people are unaware of this. The New York Stock Exchange (NYSE) runs the largest corporate bond trading system in the world. Corporate bonds, municipal bonds, foreign debt securities, U.S. Treasuries and government agency bonds are all traded on the NYSE.
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The Beginning of the U.S. Bond Market
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The NYSE traces its beginnings to outdoor gatherings of merchants and bankers in an area known today as Wall Street. The encounters began after the Revolutionary War. The men -- they were all men at the time -- traded stocks and bonds. It was important for the traders to meet in person, because paper certificates and money changed hands. One of the first securities traded were Revolutionary War bonds. The newly established federal government needed money to repay war debts, so the government raised the cash by issuing bonds that the Wall Street traders sold.
The U.S. Bond Market Today
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Stocks and bonds are traded in the markets today just as they were at the dawn of our nation. An investor decides to buy or sell a bond. The order is placed with the investor's broker and posted so traders can see the information. Orders are completed on a price- and time-priority listing. Bond trading is transparent. The trade data is available for anyone to see. An order is executed and the information is relayed back to the broker and client. Today's technology allows all of this to occur within seconds.
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Listed Bonds
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The NYSE lists bonds in the same way stocks are listed on various exchanges. Bonds and preferred stocks of companies trading on the NYSE as well as their wholly owned subsidiaries are listed. Information on a bond can be found along with its symbol and cusip number. Nine-digit cusip numbers identify most securities, including registered U.S. and Canadian companies, municipal and corporate bonds, U.S. Treasury and government agency bonds. Bond symbols are not as well known or easy to remember as stock symbols. Many companies have a lot of outstanding bonds, each with its own symbol and cusip number.
Locating Bond Information
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A number of financial websites provide bond information, including "The Wall Street Journal" and "Bloomberg." The sites list prevailing rates for various types of bonds as well as individual bond data. "Reuters" posts a list of new issue bonds. Fidelity Investments has an excellent interactive bond finder that allows input for certain criteria, such as type of bond, price and rating and creates a list of currently traded bonds meeting specific guidelines.
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References
Resources
- Securities and Exchange Commission: Cusip Number
- Economy Watch: Corporate Bond Market
- "Wall Street Journal": Corporate Bonds
- "Bloomberg": Corporate Bonds
- "Reuters": Forward Calendar --- U.S. Corporate Bond New Issues
- Fidelity Investments: Bond Finder
- Investing in Bonds: Corporate Markets at a Glance
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