Historical bond prices

Is there the ability to look at the historical bond prices of the bonds listed on Wisalpha? Something akin to a share price chart.

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Great idea if there was.

Hi @hedge2004, Thanks for the request! I can confirm, this is something we will be working on in the near future. -Lizzie

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Historical bond prices would be a useful addition.

Is it possible to provide a bit more info, either in the forum or as a FAQ, about:

  • How are corporate bonds priced (ie is it all OTC, or is there some % on a market)?
  • How often do prices move (presumably only when a bond is traded, how often does this happen, typically every min/hour/day/week)?
  • How does WiseAlpha update its pricing - if trades are OTC how do you get a ‘market price’?
  • Does WA take a spread or commission between buying from the external market, and issuing on the internal WA market?

Thanks,
Mark

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Hi Mark,

Please find our pricing policy here.

Thanks,

Thanks Callum, that’s useful. Just to confirm my understanding:

The (fractional) bonds on the WA market are updated daily to reflect the price of the (actual) underlying bond?

The ‘offer’ price is used, and there’s no spread as such on the WA market, but instead there’s a 0.25% sales fee?

Hi @MarkO

Prices are updated at-least daily to reflect the “offer price” of the underlying bond, yes.

Composite Bloomberg Bond Trader (CBBT) by Bloomberg has the following definition:

Composite Bloomberg Bond Trader (CBBT) is a composite price based on the most relevant fixed income trading quotations on Bloomberg. It’s a weighted average of dealer-contributed prices computed in near real-time that indicates where you can reasonably expect to find transaction opportunities on Bloomberg’s Fixed Income Trading platform during trading hours. Prices are updated as dealer levels change.

So I’d paraphrase to say the offer level is where you can reasonably expect to be able to buy a bond from dealers during trading hours.

To be clear, dealers don’t buy at “offer” levels. They buy at “bid” levels. The difference is known as bid-offer. If you look at a bond on Hargreaves Lansdown’s website (say Alpha Plus) you can see both the buy / sell price for that instrument.

Bond trading is complicated by the fact there is scope for bilateral negotiation. That is to say, sometimes dealers can be “axed sellers” of inventory, which you can think like a “sale” offered by a shop. Unlike shops they might be anti-axed as well, which means they are sometimes highly reluctant to sell bonds at a level they “offer” them – and if they don’t physically have the inventory, they often will not be able to sell you what they don’t have (contrast with equities where going short is common).

In the bond market, clients can buy/sell bonds to other clients, via market participants known as brokers. The reason brokers are in business is because they help clients sell higher than dealers’ bid levels to other clients who buy below the dealers’ offer levels.

In summary, then, WiseAlpha is connected to both dealers and brokers. We price the bonds on our internal market, using the pricing policy. There is no “spread” or “commission” between where we bought a bond externally and where it’s issued.

As our business is becoming more established in the bond markets (i.e. we are connected to more liquidity providers, and are becoming larger clients to our existing dealers and brokers), we see more opportunities to buy bonds below the “offer price” which represents an additional revenue opportunity for WiseAlpha.