Since fixed income brokers and dealers work with fixed income markets to help clients earn a profit trading while minimizing financial risk, it’s important to keep knowledge of insurance and exchange rate risks, securities and domestic and foreign economies current. It’s also vital to stay up to date with financial and investment information on fixed income securities, municipal and corporate bonds that will comprise your clients’ portfolios.

Seek educational opportunities to become a reputable fixed income broker and maintain up-to-date information on investments, financial markets and regulations. In addition to receiving the same training as other brokers and dealers, find specialized training for your field by:

1. Signing up for classes through financial institutions or business schools to ensure you’ve got the financial information and analysis skills to be a successful fixed income dealer or municipal bond dealer.
2. Looking for seminars to keep your information on the securities market and strategies for fixed income broker dealers up to date.
3. Finding online courses or webinars to serve as continuing education as you work for a fixed income brokerage.
   

Action Steps
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Take classes for fixed income or municipal bonds dealers to study this specific type of trading

Fixed income and municipal bond dealers will benefit from courses that cover the complexities of subjects like capital market structures, yield curves and risk analysis. Programs that award certifications or accreditation for completion will also demonstrate your expertise in the field.

I recommend: Fixed income dealers and muni bond dealers can receive certification through Robins School of Business. Courses cover topics such as credit analysis, advanced API for fixed income and valuation and pricing. Euromoney Training offers classes as learning opportunities for fixed income securities dealers.

Attend seminars to keep current with issues and regulations that affect fixed income brokers

Focused workshops will help you fill in any gaps in your fixed income market knowledge, keep you up to date with regulations and securities information and help you with data on current municipal bonds for sale, for example. Consider refresher classes after substantial shifts in the market to ensure your strategies are on par with buying trends.

I recommend: Treasury Resources Consulting and Investigating offers seminars like Fixed Income Trading 101, a program on fixed income markets designed for traders, portfolio staff or dealers. If you’re a fixed income dealer, find bonds and fixed income courses scheduled near you through the listing at Training Pages.

Obtain self-paced learning materials to hone skills while you work as a broker for fixed income

While working as a fixed income broker dealer, find online or downloadable training courses that you can study in your spare time. If you have the time, but can't find an instructor-led class near you, look for virtual training courses that give you the same personal instruction via videoconferencing or computer.

I recommend: New York Institute of Finance offers virtual training on fixed income topics such as bond pricing and trading, securitized assets and mortgage-backed securities. The institution also offers on-site, instructor-led training opportunities for fixed income brokers and dealers. Find eLearning opportunities for fixed income brokers through Securities Operations Forum. Credits from the online courses may also count toward its credential program.

Many elect to do business with fixed income brokers and dealers. Fixed income is considered safe because it is backed by either the U.S., state or city government. However, you also can invest in corporate bonds.

Fixed income securities, such as municipal and treasury bonds, play important roles in both domestic and foreign economies. If you invest in the right securities, you can rely on consistent income. Consider the following income securities you can invest in with fixed income brokers and dealers:

1. Register with a fixed income brokerage firm that specializes in treasury securities.

2. Use municipal bond dealers that focus on municipal bonds.

3. Employ fixed income brokers and dealers to invest in corporate bonds.

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Sign up with a fixed income brokerage firm that focuses on treasury securities

Are you interested in fixed income, but want to help your federal government pay off its debt? Consider investing in treasury securities. These securities include U.S. savings bonds and notes. You can count on receiving interest and principal payments on time. You can buy and trade these securities through fixed income brokers and dealers.

I recommend: T. Rowe Price is known not only for selling mutual funds, but also as a fixed income dealer. This broker for fixed income has many bond funds that invest in treasury securities. OptionsXpress is also a fixed income broker. Though it’s an online fixed income brokerage firm, you can obtain help from its support staff if you need assistance.

Employ municipal bond dealers that specialize in municipal bonds

Municipal bonds are essential for financing local governments' projects. You'll be buying municipal bonds so that your local governments can fund projects, including school construction, bridges, hospitals and roads. One of the reasons why municipal bonds dealers are successful in buying and selling bonds is that these securities tend to be tax-free. However, you'll want to ask your municipal bond dealer about the tax risks involving these bonds.

I recommend: Go to FMS Bonds’ website to see all of the municipal bonds this fixed income broker offers. If you’re new to municipal bonds, this fixed income brokerage company has a very good educational section. Also check out BuySellBonds.com. This is one of the popular municipal bond dealers for buying and selling municipal bonds.

Invest in corporate bonds with fixed income brokers and dealers

Like governments, corporations sell bonds to finance their operations. Unlike government bonds, corporate bonds can be risky. These bonds are graded, based on how financially strong the company is. Therefore, you'll definitely want to seek advice from your fixed income dealer.

I recommend: Fidelity is one of the top fixed income broker firms. You’ll have to be an account holder with the firm in order to purchase corporate bonds. You’ll also want to check out Zions Direct. You can access its database, which contains over 25,000 bonds, including corporate bonds.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Make sure your fixed income broker diversifies your portfolio. In other words, have a balance of treasury notes, CDs (certificate of deposits) and bonds.

Fixed income brokers and dealers are popular to do business with due to their considered safe nature, being backed by the nation, state or city governments. Examples of fixed-income securities include municipal and treasury bonds. When dealing with fixed-income brokers and dealers, it can help to be educated on their jargon to improve the flow of communication. You'll want to know about bid lists, defeasance of fixed-income assets, and how an option-adjusted spread will affect you.

Action Steps
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Bid list

The bid list is a written list, or inventory, of the different securities that are being held by a particular investor. Bid lists are presented to fixed-income brokers so that they can quote the prices to the investor at which they would be willing to purchase the securities in the inventory.

I recommend: Yahoo.com offers information with respect to MarketAxess and it being awarded a patent for functionality in regards to its electronic bid list and offer list.

Bulge bracket dealers

Bulge bracket dealers are some of the most well-known fixed- income brokers and dealers in the United States. Many of these brokers and dealers are associated with Wall Street. They work for large companies, such as Goldman Sachs, Merrill Lynch, Morgan Stanley and Deutsche Bank.

I recommend: Zacks.com offers information on the trimming of bulge bracket dealers due to subprime earnings.

Concessions

Concessions are the fees that are paid to fixed-income brokers and dealers in return for their underwriting or selling an investor's debt securities. When mentioned in respect to a reference notes transaction, the concession is the only portion of the total concession that a dealer or broker would earn.

I recommend: Fidelity.com discusses its fixed-income concessions, including its minimum and maximum annual concessions.

Defeasance

Defeasance occurs in fixed-income assets when they are of extremely high quality. Typically, these types of fixed-income assets would have a rating of AAA or be backed by the government. The cash flows of these fixed-income assets would be matched precisely with the structured and well-defined liability payments that are made by the purchaser of the assets.

I recommend: On Investopedia.com, interested parties can learn how defeasance is able to affect and reduce fees that have been associated with commercial real estate.

Lead(s)

Lead(s) are the one or more primary dealers that have been put in charge of the responsibility to underwrite and distribute for a particular syndicated debt issuance.

I recommend: Reuters.com discusses the hiring of Michael Gelband by Millennium Management LLC to lead its global fixed-income business.

Option-adjusted spread

An option-adjusted spread is often abbreviated as OAS. This spread occurs between a fixed-income security and a benchmark security.

I recommend: To learn how to calculate the option-adjusted spread (OAS), review the material presented at MathWorks.com.