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Duration: 7:22

Instructor:

Contributor: Interactive Brokers

Level: Beginner

Learn where to locate columns tailored to bond trading and how to add them to your Mosaic display. Access US government yield curve and locate accurate descriptions for individual bonds.

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Study Notes:

Welcome to Traders’ Academy online courses. This is lesson one of Bonds and Fixed Income Trading for
TWS. This lesson will deal with configuring the Mosaic workspace to show key bond data. And you will
also learn how to find out more details about bonds displayed on the Monitor page. To get underway
we will look at locating some important market data useful to bond market participants.

Predefined Watchlists – Even if you are not a fixed income trader, you may be keen to know yields along
the US government bond curve. From your Monitor window, use the Predefined Watchlists to display
the Mark Yield across the curve. Click on the ‘+’ symbol to the right of your open tabs and select
Predefined Watchlists. Here you can view price and yield data for US Treasuries and Corporate Bonds.

For a snapshot of the curve look at the On-the-run watchlist. Here you will see last prices for 3 & 6
month bill maturities, 2, 5 and 10-year notes & the 30-year bond. The watchlist displays change in price
and percentage and also the corresponding Mark Yield. For a more complete yield curve, choose the All
except STRIPs selection from the Predefined Watchlist page. Use the scroll bar to move down the list of
maturities. Finally, selecting the US Corporate Bond watchlist will show you last traded price and change
on the day for Most Actively Traded US corporate bonds.

You will probably have noticed the small red circular badge next to several listed bonds. If I hover my
cursor over any of these the following message indicates that trading in some bonds displayed is
restricted to institutions only.

Configuration – Let’s configure the Mosaic workspace to accommodate some of the things that a bond
trader might wish to see. I’m going to unlock the Mosaic workspace by clicking the padlock to the upper
right of the screen. You will see a green box appear around the workspace informing me that I can move
any of the individual tiles around. I am going to widen my Monitor panel and then show you several
useful columns to add to this tile.

There are two ways to add more columns. First, if I simply hover above any columns header, you will see
a pop-up. I will click on Insert Column. As I do this a floating menu provides a host of choices organized
by category. If I follow the arrow though the grouping for Financial Description it will reveal available
choices. From here I will add Company Name. As that column header is added to the layout, the floating
menu disappears. So let’s access it again. This time if I right-click a column header I immediately create
the floating menu and I can again select Insert Column. Now look further down the menu to locate the
category named Bonds. Inside this menu are many fields specific to fixed income. I must select one
column at a time, and then return to Insert Column. I will add CUSIP, which is a bond identifier, coupon,
Payment Frequency and Ratings. From the same category, because it is specific to bonds, I will choose
Bid Yield and Ask Yield. But if I want to add the live quote – the market bid and ask prices – that is
available from the Prices category.

I will stop adding columns at this point and hopefully you now know how to add data important to your
trading and you can also see why I widened this monitor panel. Finally, if you added a column but want
to move it left or right, just hold the cursor above that column and hold the left mouse button down and
reposition. Then let go of the mouse button.

Contract Description – With the Monitor now configured to enable us to better view bond market data,
I want to show you how to locate the description of a bond. In the next lesson you will learn how to
locate and add bonds to your display. But for now I’ll demonstrate using one of the items I have already
loaded. To find out more about a specific instrument, click-right on the ticker symbol and locate the
expansion arrow for Financial Instrument Info in the floating menu. You may choose to display either a
pop-up within TWS by selecting the Description, or you can choose a web display by selecting Details. In
either case, you should be able to learn as much as you need to about the underlying bond including
Last Trading Date, Payment Frequency, Call option provisions and Class of Debt.

Raw or Net Pricing – Here’s a brief word on the price display in our platform and how you might want to
configure the quotes you receive. TWS connects Interactive Brokers’ clients to multiple electronic bond
venues. That means that the best offer from one venue and the best bid from a rival venue may be
available to users. Different exchanges have different rules and fee structures. Because different fees
apply to different venues, we allow clients to view bond quotes, and therefore yield displays, to include
or exclude those exchange fees.

Raw Prices do not take exchange fees into account and are, therefore, narrower.

Net Pricing, on the other hand, does include the impact of fees on the effective price of the bond and
yield your bond will execute at.

In order to configure TWS to either, use the File dropdown menu to access Global Configuration and
click the expand sign next to the Display menu and click on Ticker Row. Then to the right you should see
the choice between Net and Raw as your default display under the section Fixed Income pricing. Hover
above the blue symbol to read the pop-up explanation for either.

Finally, notice in the line above that you can choose the display setting between actual dollars or
thousands of dollars using the letter k for thousands.

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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