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So I'm a tad confused. For the past 2 days I've placed an order near market open in an attempt to sell 4 bonds of
BAT CAP CORP MTN CALL MAKE WHOLE
4.75800% 09/06/2049
My ask has been for 109 even, which would be too high for today's trades, but under the prior day's trades. Fidelity lists the last as 109.3x. I dug into the last trades and am surprised the bonds didn't sell yesterday. Is this normal though?
if it's a market order AND only if there's enough liquidity/depth then there's no reason why your order isn't going thru. As a last option just contact fidelity directly.
Buying or selling bonds 4 at a time is most likely your problem. Some bonds won’t ever trade in that quantity but even if they do you may struggle to get them sold without stiff discounts
i never buy individual bonds except treasuries and even that is rare..bond funds are so much better at evaluating bonds and techniques that make things like riding the yield curve more efficient then i can do on my own ..plus you have spreads and premiums and discounts and liquidity to deal with ...no thanks
I'd picked these up because it was a one-off small bond sale. I had a theory that small investors might make pricing mistakes when it came to selling small amount of bonds and may be too tiny to attract the big boys. These long term investment grade bonds had been selling in the 102 range, and this offering for 4 at 97 popped up and I snagged them. The bid/ask on these is a few dollars and they don't seem to trade all that often. I've seen no similar opportunity pop up to make it a more likely amount of bonds. Giving up, it seems I'm running into the same issue when I try to sell them...
It's not like 4.75% is a terrible yield to have, it's just struck me as curious as to why they are so hard to unload. It could be because it's tobacco.
I'd picked these up because it was a one-off small bond sale. I had a theory that small investors might make pricing mistakes when it came to selling small amount of bonds and may be too tiny to attract the big boys. These long term investment grade bonds had been selling in the 102 range, and this offering for 4 at 97 popped up and I snagged them. The bid/ask on these is a few dollars and they don't seem to trade all that often. I've seen no similar opportunity pop up to make it a more likely amount of bonds. Giving up, it seems I'm running into the same issue when I try to sell them...
It's not like 4.75% is a terrible yield to have, it's just struck me as curious as to why they are so hard to unload. It could be because it's tobacco.
It’s because of the trade size. When you thought you out smarted the market it got you. When you figured the big boys weren’t attracted where did you think the liquidity would come from?
It’s because of the trade size. When you thought you out smarted the market it got you. When you figured the big boys weren’t attracted where did you think the liquidity would come from?
I can still sell it at bid, and notch a 10% gain in the process as well as being paid for waiting bringing me to around 12-13% for 6 months. It's not the worst trade of 2020.
However, going into it I knew there would be a learning curve. Had a theory and tried it out. Not just here, but snagged some odd bonds here and there in different classes. Paying my tuition on my own terms so to speak, but in light of that, I am curious if there are other bond traders that have a better understanding.
Ironically, it's done better than some small issue AAA rated Federal ag bonds I acquired at issue. 25 of those, but with only $28M outstanding it seems to be the least liquid of my bond holdings at them moment. Last trade has a 1% gain with a yield of about 2.75%. I may have to wait 4 years to realize those.
Well, sold them for 111 and change this morning by selling to the bid. Weird market.
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