From my limited understanding, if I were to purchase a corporate bond for example, the process goes like this:

Other Brokers -> My Broker -> Me.

The Other Broker sells it to My Broker with a markup, and My Broker sells it to me with another markup. So for example the bond price would be 85 -> 87 -> 90. I would pay 90.00 for this bond.

Now my question is if I were to sell this bond, I obviously have to go through My Broker to tell him/her that I am selling this bond. But am I selling to My Broker or Other Brokers? In other words is My Broker buying these bonds back from me and selling it onward to make their own profits, or are they actually helping me sell it to Other Brokers? Since I am a retail investor and now I am on the selling side, am I able or request My Broker to markup for my benefit?

My other question is about corporate bond pricing on websites such as this:


As you can see, the Last Price is 100.031, the bid is 100.10, and the ask is 100.12.

Why is the Last Price outside the range of bid and ask? If I wanted to purchase this bond, would I pay the bid price 100.10 or the Last Price 100.031, or is this the price My Broker would pay and I would have to pay an additional markup?

Thanks for the help and clarifications.

3 Answers 3


You are missing one step resp. two steps. It is

Seller -> Other Brokers -> Exchange -> My Broker -> Me

If you are selling a bond, it is the same in the other direction: then you are the seller and it goes

Me -> My Broker -> Exchange -> Other Brokers -> Buyer.

Essentially, it is the same as on shares.

Disclaimer: I only know about the German market, things might be different in other countries.

  • Thanks for your answer. Is the "Exchange" a marketplace or just the act of the seller and buyer conducting the transaction? Also if I'm doing the selling as a retail investor, am I able to markup my bond that I am selling? Thanks. Jul 24, 2023 at 8:05
  • The "exchange" is the market place, the "stock exchange". As you mentionned the Frankfürte Börse, that's one place where you can shares as well as bonds in Germany (resp. its digital counterpart, Xetra).
    – glglgl
    Jul 24, 2023 at 8:39

It depends if they're acting as a broker (facilitating transaction between two counterparties, i.e. you and a willing buyer/seller) or dealer (buying/selling from/to clients using their own inventory)

Compared to stocks, there is more diversity and less standardization in bonds (seniority, maturity, coupon, call/conversion features, covenants, etc.), which leads to lower liquidity and wider bid/offer spreads. Last price is based on the last transaction and could be stale compared to current quotes. Consider a bond that traded once on Friday afternoon and now you're looking at quotes as of Monday morning.

Bonds may not be continuously traded/quoted, so you might have to issue an RFQ (request for quotes) to sell your bonds.


The last price is just that, a single sample point. Both bid and ask change continuously, so it isn't clear last is actually particularly meaningful except as a hint of what range some one individual thought the price ought to be in. A sale takes place when, and where, bid and ask reach agreement, not where last happened to be.

Since I'm strictly in index funds, I'll leave the question about flow of shares and where brokers take their profit to someone more familiar with that.

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