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The corporate bond market is large and liquid,
with daily trading volume estimated at $23 billion. Most corporate bonds
trade in the over-the-counter (OTC) market. This market does not exist in a
central location. It is made up of bond dealers and brokers from around the
country who trade debt securities over the phone or electronically.
Market participants are increasingly utilizing
electronic transaction systems to assist in the trade execution process.
Some bonds trade in the centralized environments of the New York Stock
Exchange (NYSE) and American Stock Exchange (AMEX), but the bond trading
volume on the exchanges is small. The OTC market is much larger than the
exchange markets, and the vast majority of bond transactions, even those
involving exchange-listed issues, take place in this market.
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