Online bond brokerage services provide the benefit of more transparent pricing since investors may compare bids and ask spreads with ease. Some firms also charge fees, which may be simpler to understand than bid and ask spreads.
Some brokers have reduced their spreads to prevent losing clients to rivals. So a bond broker acts as a middleman between bond purchasers and bond issuers or sellers. In exchange for compensation, the broker buys and sells bond securities on behalf of investors on the trading floor of an exchange or in the over-the-counter (OTC) markets.
They offer a steady source of revenue. Bonds typically pay interest twice each year. Bonds are a technique to protect capital while investing since bondholders get their whole principle if the bonds are held to maturity. The exposure to more volatile stock holdings can be reduced with the use of bonds.
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