Investing in Bonds

Primary Bond Market

For corporations and municipalities, issuing a bond is a lot like an initial public offering (IPO). An investment firm purchases bonds from the issuer and then works with other investment firms to offer the bonds for sale to the public.

Secondary Bond Market

In the secondary market, bonds are traded over-the-counter and in the bond trading rooms of stock exchanges and brokerage firms.

Bond Markups

Though you will not typically pay a sales charge when you purchase bonds in the primary market, all bond trades in the secondary market incur sales charges. Sales charges are computed differently for bonds than they are for stocks.