So at exactly 3 PM yesterday, I downloaded all the TIPS quotes from Schwab. This morning I copied the data for Thursday from the WSJ site into the same spreadsheet (conveniently this worked by just copy/paste, though I did have to, tediously, convert the 32nds to cents). Anyway, the results are that there was very little difference. The average ratio of the Schwab price to the WSJ price was 1.00036 (a 0.036% difference) the range was from 0.99926 to 1.00113 (-0.074% to +0.113%).jeffyscott wrote: ↑Wed Jun 22, 2022 3:48 pmOn the Treasury quotes page they say:squirrel1963 wrote: ↑Wed Jun 22, 2022 3:24 pmKevin M wrote: ↑Wed Jun 22, 2022 1:52 pmBased on the transcript of the Fidelity presentation on fixed income pricing at Fidelity, this does not seem to be true. They do have a small inventory, but they also put your order out to the large dealers who are the market makers, and you get whatever price they are offering (if your order gets filled). So the market makers make a profit on the bid/ask spread, and Fidelity would make a profit on it if your order is filled from their inventory. Fidelity adds no markup or fee. According to the Fidelity presentation, this is all quite transparent. You should read it.squirrel1963 wrote: ↑Wed Jun 22, 2022 1:32 pm There is a transaction fee which is built into the price you get. So your ASK price when you buy will be a bit higher than compared to a large transaction. Likewise when you sell your BID price will be lower.
Unfortunately this is not very transparent.
I just bought TIPS last week from Schwab, I then compared my purchase price with WSJ prices on the same day and found the transaction cost to be in the 0.3% range, see this post for details :
viewtopic.php?p=6737584#p6737584
I haven't found details on what dealers/brokers are included in the quotes WSJ publishes. For example, primary dealers trade amongst themselves, so if their prices are included, I would think they'd be better than the prices offered at the brokers.
Kevin
Thanks for correcting me, I need to read that transcript again. So this means that the 0.3% I paid compared to WSJ is simply the higher ASK on account of my trades being very small (10-30 bonds)?
Edit: sometimes in the next couple weeks I'll buy more TIPS from Fidelity, it'll be interesting to see if I get similar pricing compared to WSJ.
Treasury note and bond data are representative over-the-counter quotations as of 3pm Eastern time.
While that's not on the TIPS page, presumably it applies to those as well. So unless you are always buying at 3 PM eastern, you can't really use those to determine your price difference.
(Also anyone looking at those should be aware that the part of the price to the right of the decimal point is in 32nds, not cents)
Note that not all the Schwab quotes were for min quantity of 1, but both the best and worst (relative to WSJ) did have minimum of 1.
Also, except for the shortest terms, the YTM differences were ~0.02% or less. For maturities of about 2 years or more, i.e. 7/15/24 or later, the worst difference in YTM was 0.023% (for 1/15/25).