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