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DeGiro - Bonds

  • 18-08-2020 1:06pm
    #1
    romek95
    Registered Users, Registered Users 2 Posts: 8 ✭


    Hi investors,
    I have a question in relation to the DeGiro investing platform - which I am planning on using for my future investments. With current focus on ETF and common stocks, I keep an eye on adding some bonds to my portfolio into the coming months.

    DeGiro is offering a bond XS0765299572 (AAB 4.125%28MCH22) that is currently trading at 107.50 EUR on Euronext Amsterdam.

    After researching the bond, I found official documentation that the above mentioned bond has been issued in face value of 1000 EUR (PDF source in the link below). Also, the bond is paying a fixed 41.25 EUR coupon annually.

    The question is - will DeGiro allow me to purchase only 1 "unit" of the above mentioned bond for 107.50 EUR and I will be receiving a fixed coupon of 4.13 EUR (rounding), or am I supposed to multiply the ticker price by 10, giving me the transaction cost of 1075.00 EUR?

    I hope the above explanation and example of the bond XS0765299572 states my question very clearly.

    At ABN AMRO website you can search for the bond XS0765299572 and see the details of this security (with prices in 1000s, not in 100s like in DeGiro).


Comments

  • #2
    cromelex
    Registered Users, Registered Users 2 Posts: 235 ✭✭cromelex


    Degiro is quoting all bond prices in percentage (well, technically, in per 100 facial amount).

    That bond is issued in multiples of 1000, therefore any trade needs to be a multiple of that amount.

    If you try to buy 100 euro of this you will get an error saying that the amount is not a multiple of the lot (1000).


  • #3
    romek95
    Registered Users, Registered Users 2 Posts: 8 ✭romek95


    cromelex wrote: »
    Degiro is quoting all bond prices in percentage (well, technically, in per 100 facial amount).

    That bond is issued in multiples of 1000, therefore any trade needs to be a multiple of that amount.

    If you try to buy 100 euro of this you will get an error saying that the amount is not a multiple of the lot (1000).

    That is the answer I was looking for, but how do you know what DEGIRO pricing is on those bonds?

    Just went to the broker and tried to proceed with the purchase of 1 QTY (100 EUR) and brought me to the confirmation page. Did not try to actually purchase the bond for obvious reasons, but I wish to understand the way DEGIRO priced the security.

    Thank you for the answer


  • #4
    cromelex
    Registered Users, Registered Users 2 Posts: 235 ✭✭cromelex


    Not sure if I'm following your question, but if you go to the bond search on Degiro, all of them are quoted with a price per 100. It's just a way to display a percentage that is easy to read.

    I tried with the first bond you mentioned and it actually throws an error screen saying the quantity is invalid as it's not a multiple of 1000.


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