This goes beyond the fact that the bond market is an over-the-counter market and the institutional buyer gets coverage from numerous firms.
This, of course, always led to my wondering whether there wasn't a business opportunity available by giving better bid-offer spreads to the retail market.
My friends and I were never smart enough or energetic enough to figure out how to do this, but also the technology wasn't really there. Today this has all changed - at least the technology part. Investors are getting better opportunities to get competitive prices.
Along these lines, I recently came across a very interesting site at Zions Bank. Although I haven't used it, I have been following it and have to say that it looks promising for those, with time on their hands, who are in search of higher yields to follow ongoing auctions.
The site offers auctions (instructions available at the site) as follows:
|Source: Zions Bank|
CLICK TO ENLARGE Note the Verizon 11-month bond yielding 2.35%. Again, if individuals have the time to do the research and follow the auctions, these types of issues at attractive yields are available for bid.
Click on "view auction" and you get:
CLICK TO ENLARGE Here you see that there are 5 bidders and when the auction ends, along with detail on the issue.
Although I haven't used this auction site, I do find it interesting and potentially useful, especially for those seeking income.
I would be very interested to hear of the experiences other investors may have had with the site.