The U.S has the world’s largest and most sophisticated bond market. Bonds from a variety of issuers are traded in this market according to the following distribution:

  1. Treasure Securities – Bonds issued by the US Federal Reserve Board.
  2. Corporate Bonds – Bonds issued by American corporations.
  3. Municipal Bonds – Bonds issued by municipalities in the US.
  4. Mortgage – Bonds that are backed by mortgage, Mortgage backed Securities (MBS).


Every purchase and sale transaction of a security listed on the stock exchange can be conducted solely through intermediaries who are “stock exchange members” who are called “brokers.” Every bank is a broker, but in addition to banks, there are also private brokers. Most transactions take place on the stock exchange premises, but the stock exchange also allows brokers to conduct transactions directly between each other. However, although they must report these transactions to the stock exchange, which registers them in its records. Registration with the stock exchange is important, because it reflects the total volume of transactions conducted in any given security, both on or off the stock exchange