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How to trade bonds online


Trading bonds online gave a whole new advantage to traders and investors. It becomes faster and more time-efficient, allowing traders to achieve their financial goals quickly. With just a simple click, bonds online provide access to a wide variety of fixed-income securities you can choose from.

In this guide, we’ll walk through the basics of trading bonds online, from choosing an online brokerage to executing trades.


Benefits of trading bonds online

Trading bonds through online brokerage accounts offer numerous advantages to fixed-income investors and traders. The 24/7 accessibility allows investors to search and trade many bonds without communicating with a broker telephonically.

These platforms often boast reduced commission rates, offering a cost advantage and enhanced price transparency compared to conventional bond brokers. Users can filter bonds based on personalised criteria instead of depending solely on a broker’s inventory. They also gain direct control over placing orders, monitoring pricing, and managing their bond portfolio.

The convenience of these platforms is undeniable, offering effortless access to accounts, comprehensive bond data, and financial statements through a secure online environment. Furthermore, their user-friendly nature ensures that even beginners can trade individual bonds seamlessly with just a handful of clicks.


Choosing an online broker for bonds


How to trade bonds online


The first step is selecting an online broker that provides access to the bond market. When comparing brokers, look for these key factors:

Bond inventory: Make sure the broker offers a wide selection of individual bonds from both government and corporate issuers. Some only provide access to bond ETFs.

Commissions and fees: Bonds online may incur commission fees, so compare costs across brokers—some charge per trade while others charge a percentage of the total transaction. It’s also worth noting that some brokers might offer promotional rates or waive fees for new customers, so look out for any deals that might be beneficial in the short term.

Tools and research: When looking for bonds online, it is important to seek out robust screening tools to search for bonds. Additionally, having access to credit research and ratings can provide insight into the quality and reliability of potential bonds.

Ease of use: A user-friendly trading platform is essential for trading bonds online, and it should offer intuitive features such as real-time quotes, interactive charts, and seamless order entry functions. The site’s navigation should be straightforward and hassle-free, allowing users to easily access the tools and information they need to make informed decisions and execute trades quickly.

Among the leading CFD trading platforms, is an online broker with more than a decade’s experience helping beginner and seasoned traders. The platform is fully regulated in five major markets, including Europe and the UK.


Understanding bond pricing

Before trading, it’s essential to understand how bonds online are priced. Bonds are traded based on their yield, which moves inverse to price. When the yields increase, the prices of bonds decrease. Conversely, when the yields decrease, the prices of bonds increase.

A bond’s yield represents the annual interest payment as a percentage of the current price. For example, a bond with a par value of £1,000 trading for £900 with a 5% coupon would have a yield-to-maturity of around 5.56% (£50 annual interest / £900 price).

Bonds are also quoted in terms of basis points. One basis point equals 1/100th of a per cent. So if a bond yield moves from 2.0% to 2.1%, that’s a 10 basis point increase. Understanding yields and basis points is vital when searching and purchasing bonds online.

You can use’s trading calculator to calculate your hypothetical P/L (aggregated cost and charges). Using our calculator, you can quickly evaluate any position you hold or are about to open by calculating its spread, margin requirement, overn swap and more.


Finding bonds to buy

Once you have a trading account, it’s time to find attractive bonds online to add to your portfolio. Use these tips to search for and select bonds:

  • Set search criteria: Use screening tools to search by yield, credit rating, maturity date, bond type, and issuer. This lets you quickly narrow down bonds that meet your requirements.
  • Evaluate issuers: Research the financial health of bond issuers you’re considering. Government bonds carry the highest credit quality, while corporate bonds range based on the company’s financials.
  • Compare yields: Look up what other similar bonds yield to determine if a bond is competitively priced. Current Treasury yields can provide a benchmark.
  • Consider call provisions: Some bonds are “callable”, meaning the issuer can redeem them before maturity. This feature allows the issuer to benefit from falling interest rates by paying off the old, higher-rate bonds and issuing new ones at a lower rate. If you invest in callable bonds, you risk having your bonds called away and being faced with reinvesting the principal at potentially lower interest rates.
  • Diversify: Build a ladder of bonds with varied maturity dates from multiple issuers. This helps reduce portfolio risk from any single issuer.
  • Look for odd lots: One strategy to consider when trading in bonds online is to search for bonds with a quantity lower than the average. These bond lots, also known as odd lots, may be available at a slight discount. Odd lots may only be suitable for some investors and traders, as they may have slightly different trading rules and may not be as liquid as larger bond lots.

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Placing bond trades online


How to trade bonds online


Once you’ve decided to purchase specific bonds online, it’s time to place the trade through your broker’s online platform. Follow these steps:

  1. Get a quote - Enter the bond number to gather details, current pricing, and yield information. Make sure quotes are up to date before trading.
  2. Enter order details - Specify details like order type (market or limit), quantity, bond information, and special instructions.
  3. Preview order - Double-check order details like price, yield, and total cost before submitting to avoid errors.
  4. Place order - Submit your buy order during regular bond market trading hours. Orders enter the market to match bond sellers.
  5. Check trade confirmation - When your order is filled, you’ll receive a confirmation detailing the execution price, yield, fees paid, and settlement date.
  6. Mark calendar for payments - Bonds make periodic interest payments until maturity. Mark your calendar with each payment date to track income.

Trading online provides an efficient way to add bonds to your portfolio with just a few clicks. Monitor orders until complete and store confirmation records for tax reporting.

You might also like to read: How to open a free MT4 or MT5 account on

6 tips for managing a bond portfolio

Once you’ve acquired bonds, some ongoing management is required:

  1. Track pricing: Check the prices of bonds online periodically to see if yields have increased or decreased from your purchase level. Watch for callable opportunities to sell if yields tighten substantially.
  2. Ladder maturities: Build a bond ladder with staggered maturity dates. This provides continuous access to funds as bonds mature over time.
  3. Reinvest payments: Interest income can be used to diversify into additional bonds or other assets rather than liquidating holdings.
  4. Evaluate calls: Research any bonds that get called away early. Consider replacing them with similar bonds to maintain portfolio continuity.
  5. Monitor credit quality: Stay updated on rating changes or negative developments from issuers in your portfolio. Consider selling any bonds with deteriorating credit.
  6. Harvest tax losses: You can sell bonds trading below par value to realise capital losses to offset gains. Must comply with wash sale rules. This strategy can be a useful tax-planning move, especially if you have significant capital gains in a given year and are looking for ways to mitigate your tax liability.

The wash sale rule, however, prevents investors from claiming a loss on the sale of an investment and then buying the same or a substantially identical asset within 30 days before or after the sale. The purpose of this rule is to prevent investors from artificially creating losses for tax purposes.

Expand your knowledge with this write-up: How to diversify your portfolio for 2021

Key takeaways

We have summarised the information you need to guarantee you capture all essential details when trading bonds online.

  • Choose a broker with robust screening tools, inventory, and low trading costs.
  • Search for attractively priced bonds using maturity, yield, and credit rating criteria.
  • Use online platforms to place trades during market hours efficiently.
  • Monitor bond portfolios by tracking pricing, payments, and issuer credit quality.
  • Ladder maturities and reinvest income from bonds to perpetuate the portfolio.
  • Consider tax-loss harvesting bonds trading below par to offset capital gains.

With the right online brokerage, trading individual bonds is simplified. The variety and yields available online can diversify income streams away from low-paying deposit accounts. By taking the time to find value and actively manage holdings, bonds remain a viable option for income-oriented investors and traders.

Consider trading bonds online on

You can trade bonds online and other assets on Our platform offers a contract for difference (CFD) trading option. In this type of trading, you will be speculating the price of your chosen bonds without having an actual asset.

Further expand your knowledge of’s Education Centre. We offer Trading 101, which provides tips, strategies, and how-to guides. Our trading definitions make it easier to understand complex terms. Investing time in these resources can elevate your trading proficiency and confidence.

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When considering “CFD bonds online” for trading and price predictions, remember that trading CFDs involves a significant degree of risk and could result in capital loss. Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.”

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