When I order to mkt buy/sell stocks in US primary markets it excuted in seconds. In bonds markets, especialy in US treasuries, if I order to sell my bond or to buy an old bond, could my mkt order last for days, or it is like in stocks?
1 Answer
Bonds are not traded on an exchange like stocks, and so there are no "designated" market makers like for stocks, but there are some brokers that will buy and re-sell bonds to keep liquidity up (and to make a bit of profit for themselves).
So I wouldn't expect your bond trade to be executed in "seconds" but if there are buy and sell quotes listed I would expect an order within a few hours or so, but it completely depends on the supply/demand for that specific bond.
That said, be careful of the implicit transaction cost of the bid/ask spread. You always buy at the ask and sell at the bid, so if there is a significant difference ("spread") between the two, you'll need to hope that the bond price rises more then (or you keep it long enough for the coupons to overcome) the bid/ask spread.
answered Oct 18, 2021 at 15:37
