FAQs: How to Trade Fixed Income Securities in Your Account

  • What order types are available for fixed income trades?

    You can enter the following order types for fixed income trades:

    • Market – For secondary market and new issue buys, secondary market sells.
    • Limit Coupon – For new Municipal Reset buys or on hold orders of existing positions: The limit coupon represents the minimum coupon that you are willing to accept at the next auction when the rate is reset. On a new buy, if the result of the auction is a coupon level above the level you stipulated, then your order will be filled. It's a similar result for on hold orders. If the result of the auction is a coupon level above the one you stipulated, then you would keep your position, and it would pay at the rate set at the auction. Note: At the present time, only Municipal Reset buy orders can be submitted online. To submit a sell or hold order, please contact a Fidelity representative at 800-544-6666.
    • Limit Price – This is the highest price at which you are willing to buy or the lowest price at which you are willing to sell securities.
    • Limit Yield – This represents the lowest yield at which you are willing to buy or the highest yield at which you are willing to sell securities.
  • Am I eligible to trade fixed income securities on margin?

    To trade on margin, you must have a Margin Agreement on file with Fidelity. If you do not have a Margin Agreement, you must use cash. You can establish margin online, by visiting this page: Add Margin to My AccountLog In Required.

  • How do bond ratings work?

    Ratings agencies research the financial health of each bond issuer (including issuers of municipal bonds) and assign ratings to the bonds being offered. Each agency has a similar hierarchy to help investors assess that bond's credit quality compared to other bonds. Learn more about bond ratings.

  • Am I guaranteed an allocation of new issue securities?

    No, entering an order makes you eligible but does not guarantee an allocation of bonds. If the offering is oversubscribed (more bonds were requested than available for purchase) and you did not withdraw your order, you may receive the quantity of bonds you requested, a portion of the bonds you requested, or none at all. Fidelity allocates bonds as fairly and equitably as possible.

  • What are material events and issuer events?

    Material events reflect information that issuers of municipal bonds file with the MSRB's Electronic Municipal Market Access (EMMA) website at www.emma.msrb.org. Issuer events provide similar information for Corporate and Agency/GSE bonds (e.g., an upgrade or downgrade, or the issuer being placed on credit watch by ratings agencies like Moody's® and S&P®). Fidelity makes these events available to its customers for informational purposes only, and has made no independent evaluation of the information. You must make your own evaluation of the information and how it may influence your investment decision.