82,891
edits
Template:Bonds listed: Difference between revisions
no edit summary
Amwelladmin (talk | contribs) (Created page with "===why are bonds listed but not quoted or traded on exchange?=== Unlike shares which can trade on exchange, in organised trading facility|organised trading facil...") |
Amwelladmin (talk | contribs) No edit summary |
||
| Line 1: | Line 1: | ||
=== | ===Why aren’t [[debt securities]] [[traded on exchange]]?=== | ||
Unlike shares which can trade on exchange, in [[organised trading facility|organised trading facilities]] or [[over-the-counter]], [[debt securities]] ([[bond|bonds]], [[note|notes]], [[MTN]]s, [[certificate of deposit|certificates of deposit]] and so on) tend to [[traded|trade]] only [[over-the-counter]]. They are not [[traded on exchange]]. | Unlike [[shares]] which can trade on exchange, in [[organised trading facility|organised trading facilities]] or [[over-the-counter]], [[debt securities]] ([[bond|bonds]], [[note|notes]], [[MTN]]s, [[certificate of deposit|certificates of deposit]] and so on) tend to [[traded|trade]] only [[over-the-counter]]. They are not [[traded on exchange]], and (while in [[bearer]] form) tend not to be traded in the [[secondary market]] nearly as often. | ||
A given [[issuer]] tends to issue only one type of share (okay, maybe two - [[ordinary share]]s and [[preference share]]s). All of its [[ordinary share]]s are the same and are interchangeable (technically, they’re “[[fungible]]” with each other), meaning the same security is common across all [[venue]]s in the market. That’s what gets listed, and it is (relatively) [[liquid]]. | A given [[issuer]] tends to issue only one type of share (okay, maybe two - [[ordinary share]]s and [[preference share]]s). All of its [[ordinary share]]s are the same and are interchangeable (technically, they’re “[[fungible]]” with each other), meaning the same security is common across all [[venue]]s in the market. That’s what gets listed, and it is (relatively) [[liquid]]. | ||
By contrast, [[debt security|debt securities]]s come in all kinds of shares and sizes. The same [[issuer]] might issue hundreds of different series with different economic characteristics, maturities and yields and features. [[Bond|Bonds]] of one [[series]] are not [[fungible]] with bonds of other series. Hence a given [[bond]] is generally far less [[liquidity|liquid]] than an ordinary share of the same issuer. This, there are more issuers, and issues of bonds with different characteristics, which makes it difficult for bonds to be [[traded on exchange]]s. Another reason why bonds are traded [[over-the-counter|over the counter]] is the difficulty in listing current prices. | By contrast, [[debt security|debt securities]]s come in all kinds of shares and sizes. The same [[issuer]] might issue hundreds of different series with different economic characteristics, maturities and yields and features. [[Bond|Bonds]] of one [[series]] are not [[fungible]] with bonds of other series. Hence a given [[bond]] is generally far less [[liquidity|liquid]] than an ordinary share of the same issuer. This, there are more issuers, and issues of bonds with different characteristics, which makes it difficult for bonds to be [[traded on exchange]]s. Another reason why bonds are traded [[over-the-counter|over the counter]] is the difficulty in listing current prices. | ||