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Duration: 12:04

Instructor:

Contributor: Interactive Brokers

Level: Beginner

In this lesson you will be shown using several methods how to add a specific ticker to your monitor. We will discuss a short cut to finding US treasury data to add to the Monitor as well as helping you wade through the often vast selection of debt issued by a single corporation. This lesson also helps users understand where to look out for bonds denominated in non-US currencies.

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Study Notes:

Welcome to Traders’ Academy online courses. This is lesson two of Bonds and Fixed Income Trading for
TWS. This lesson will explain the various ways to locate a specific bond and display it on the page. At the
end of this lesson you should feel comfortable in finding specific bonds or a selection of available bonds
for US governments, corporate bonds or muni bonds.

Adding a ticker – With the Monitor panel now configured to enable users to see the type of information
that bond participants are familiar with, we can start to add bonds to the display. There are several ways
to load a ticker to TWS, and I will demonstrate several methods. When bonds are issued they are
designated a unique identifier known as a CUSIP. If you know a bond’s CUSIP it can be typed into a cell
to load that bond. IB has its own unique identifier known as an IBCID. This too can be typed into a cell to
load a bond. I will show you these later in this lesson, but let’s start with US government issues.

US Treasuries – In order to locate any US government issued debt simply type in US-T and hit enter.
Select bills, notes and bonds by hitting the enter key or clicking with the mouse to open the Contract
Selection display. From here you can locate products you wish to monitor or trade and add them to your
display. To the right is a scrollbar and if I drag the bar down the list you can see the vast selection of
debt to choose from.

To help refine your search let’s look at the filters in the column to the left of the Contract Selection tool.
These help you search by Exchange, Type, Maturity date and Issue date, the Coupon and whether the
bond is tradable using TWS or not. In later examples, you will also see a currency filter. Let’s walk
through these filters one at a time.

Selecting Bondlarge from the Exchange filter in this case quickly enables users to see on-the-run or
active maturities. Notice that there are just a handful of active treasuries at any one time and the
display is ranked by Maturity date from nearest to farthest. Notice also under the CUSIP column that
each bond is assigned its unique IB identifier – the IBCID. The instrument type is listed and in this case
consists of just notes and a bond. Coupons are listed in the right-hand column.

Selecting Smart from the Exchange filter displays all available issues. The available number of bond or
bill types is displayed next to the Type filter. The type is also displayed above the Contracts listed in the
center of the page. As I click on each debt type from this filter, the display returns just those instruments
that match the selection.

By selecting a specific Maturity date for your search, the number of available issues will shrink
dramatically. You may select multiple dates at the same time by holding down the shift key and clicking
suitable maturity dates.

Example – If I select Bonds from the Type filter, the search will only return a single issue for each
maturity date. You can also see a single Issue date in the filter below from that year. Below that you will
see a single coupon listed to describe that bond’s unique profile. Now, if I select a range of dates from
2026 through 2030, the search will return a list of bonds to choose from. Each bond has its own issue
date, and the Coupon filter also reflects this change to the search. This may help you locate a bond
within a suitable maturity range and specific desired coupon.

To add one of these to your Monitor, click on the line in the Contract Selection tool and use the Add
button at the bottom of the page. Click additional bonds if you wish and click Apply. You can select
multiple bonds by depressing the shift key and click Add. You could also choose the Select All button,
which will highlight all bonds on display and add them to the Monitor page.

So remember that if you wish to add any US debt, always start with US-T for US treasury.

Corporate bonds – Let’s look next at adding corporate bonds to your monitor. The process is similar to
that for US treasuries, but the starting point is to enter the company’s stock ticker. In this example I will
use the underlying ticker symbol for Deere & Co (Ticker: DE). This will help you understand a little more
about refining your search and perhaps avoiding simple errors.

Type DE and hit enter to reveal the contract selection menu. All listings for underlying DE are displayed.
However, you should look carefully before making a selection. Shares in Deere are listed primarily on the
NYSE – the top selection. But they also trade on both EBS and FWB in Europe. However, the same DE
ticker symbol is also assigned to another company listed on Canada’s Venture exchange. We are
searching for fixed income. Note that DE is also assigned to the German Republic and selecting
Government Fixed Income from the menu would list outstanding German government debt in euros.
The correct selection is listed under Corporate Fixed Income. Click that selection to display the Contract
Selection tool. If I widen the Issuer column this will reveal all subsidiaries whose debt is listed in TWS.

The filters will only appear when an entity is selected. I’ll click on the top level Deere & Co and the
display will populate with all outstanding Deere bonds. Notice that the list of filters also activates. You
can see how the available listing changes if another issuer is selected from the filter.

Earlier I mentioned that the Filters column might also display a currency selection menu. This specific
ticker is a great example of the care you should take in locating bonds. At the top level of Deere & Co
note the information displayed about the listing of bonds. This reflects the Issuer, type, Exchange and
Currency. You can see that each of the listed bonds is in USD. But there is no currency filter listed in the
left column. That’s because this issuer, Deere & Co, has only issued US dollar denominated bonds.

However, if I select the next entity, John Deere Bank SA, look what happens to the Currency above the
display – it displays bonds in EUR or euro currency. Once again, there is no currency filter to the left for
this entity as it only issues in euro currency. If I make the next selection for John Deere Funding Inc, the
display lists only bonds denominated in Canadian dollars. Again, there is no currency filter. There are
more USD bonds under John Deere Capital Corp but none of these subsidiaries issues in more than one
currency. For other corporate bonds, you WILL see that currency filter when the entity issues in multiple
currencies. In this case the filter can be applied to display ONLY bonds denominated in that currency.
Back to Deere & Co and I am ready to make a selection. As with treasuries, simply highlight the bond you
wish to add to the Monitor and click Apply and OK when done. The monitor now reflects the bonds I
have added and when clicked, the bond will display in charts, order entry or any other color-linked
panel. I will return to Order Entry in another lesson.

Add a CUSIP – You should now be able to enter the ticker for any underlying security and locate available
corporate bonds. However, if you are very familiar with the instruments you wish to add to your display,
you may know the CUSIP of the bond or its unique identifier. If you do, simply type it into TWS and hit
enter. Here is an example using an IBM bond with a 6.5% coupon maturing 2018. CUSIPs are available
from a bond’s prospectus and data providers. CUSIP is 459200AS0. Adding this to my monitor you will also notice that this number populates the CUSIP column rather than its IBCID identifier. You may also locate IBCID numbers from the IBKR website page under the Products menu by selecting Product Listings and then Bonds.

Finally, if you do not know the underlying stock ticker for a corporate name, try typing in to the Monitor. Let’s use Dollar General as an example. If I type in the name and hit enter, the Search dialogue box will appear. All instances of Dollar General are returned and are grouped by Stock, Options, Futures and Bonds. If I deselect by clicking on the checkbox everything but the Bonds selection, the result is the bond issuer I was looking for. Highlight the choice and click OK to open the Contract Selection box. Available bonds for Dollar General are listed and you may now filter by Maturity or Coupon if you wish. Add any bond to the Monitor display by clicking Add and OK when finished.

Country or Sovereign Bonds – You can use the same search method to locate bonds issued by foreign
governments or their agencies. For example, if I type Brazil into the Monitor and restrict the search to
just Bonds and Notes, a selection of related bonds is returned. In this case selecting BR and hitting OK
creates the Contract Selection box displaying available issues for the Federal Republic of Brazil. Notice
that across the top of this page there is no Currency field. In this case there is a Currency filter on the left
of the page. Notice also that the display includes a Currency column and you can see that although
primarily issued in USD, this sovereign has outstanding debt in both euros and Brazilian real. Use the
Currency filter on the left to isolate just issues in either euros or local currency. Or select the USD to
select dollar issues. To return to the all-inclusive currency display, click the Smart selection under the
Exchange filter.

Likewise, if I enter the name Venezuela into the monitor the search returns two entities. Select either to
further filter on the issuer’s bonds.

Municipal bonds – Finally, I will turn to locating municipal bonds. As a reminder, if you know the CUSIP
for a specific bond, simply enter it directly in to the monitor to display. Because municipal bonds are tax exempt, they are popular investments for local residents. I will type in the state of Connecticut into the
Monitor and hit enter to start a muni bond search. From the search box, once again deselect all
instruments except munis to display the results. However, there are relatively few issues displayed,
meaning users would not get a healthy selection.

So if I type just CT rather than the full state name and then hit enter the search display returns many
additional issuers when we restrict to just munis. Note the scroll bar to the right of the Search display to
help you review additional items. To the left of the Search box is the Symbol column listing the IBCID for
the individual issue. Clicking on any bond or multiple bonds and clicking OK at the bottom of the page
will add them to your monitor. In Lesson 3 you will learn how to use the Global Bond Scanner to create a
deeper search for municipal bonds.

That concludes the second lesson in this online course for fixed income trading. You should by now be
able to easily locate bonds whether issued by the US treasury or by a corporation. And you should be
able to hunt down the bond with the exact maturity you were looking for. I also taught you some
shortcuts to help with searching for non-US sovereigns as well as municipal bonds issued by local states
and towns.

Disclosure: Interactive Brokers

The analysis in this material is provided for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IBKR to buy, sell or hold such investments. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

Supporting documentation for any claims and statistical information will be provided upon request.

Any stock, options or futures symbols displayed are for illustrative purposes only and are not intended to portray recommendations.

Disclosure: Stock Symbols

Any stock, options or futures symbols displayed are for illustrative purposes only and are not intended to portray recommendations.

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