Secondary Bond Market Explained

After issue there are all sorts of other markets out there known as secondary markets around bonds and gilts.

People in this arena are called GEMMS which stands for gilt-edged market makers, funnily enough, and are the key point within the market place.

They help by making sure that quotes both ways are available during market hours for all of the hilts out there.

There are also inter dealer brokers who are called IDBs in the language of the acronym. These people provide an anonymous dealing service, which allows the GEMMS to reduce their positions if they are getting dangerously large, and the IDBs are accessible only to the market makers.

There is also an open repo market which is partly to line up the bond market over here with how it works in countries such as America and Continental Europe that have had an open repo market with regard to bonds and gilts for some time.

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