Any bond ticker I have looked at - such as the ones showing trades on investinginbonds.com - show really crazy trades for almost any bond. A typical pattern for one bond is as shows here:
02/27/2009 10:18:00 100.353 2.054 5K 02/26/2009 11:15:42 100.345 2.002 15K 02/26/2009 11:14:00 100.444 0.755 15K 02/24/2009 15:03:50 97.000 38.404 15K 02/24/2009 15:03:50 98.000 27.501 15K 02/24/2009 15:00:31 99.011 16.696 15KBecause the above bond is close to maturity, small swings down in the price have a big effect on the yield. Even accounting for the accrued interest on the bond, buying this bond at 97 or 98 when the principal repayment is on
4/1/2009 gives a great return. If you look at the last few months of trading activity on this bond, only three times did it trade at $98.5 or below, from hundreds of trades. So these trades at $97 and $98 are not normal.Assuming you had a view of bond offers from many different bond desks - which I know is hard for a retail investor to get - would a retail investor have any shot at all of capturing these anomalous pricing events? My cynical side is telling me that these strange price glitches are not honest trades at all. I am figuring that one bond desk is doing some special favor for another bond desk, and the trade was never really available to anyone outside that private collaboration.
How often would a vigilent retail investor who had a view of many bond desks get such opportunities?