Cost of liquidity The cost of trying to buy or sell an individual bond can be hefty compared with a CDS index.
Investors might have to give up between 0.5% to 0.8% of the overall security’s value to get rid of a bond sold by a sub investment-grade issuer, based on estimates of the bid-ask spread according to Pimco. The bid-ask spread represents the difference in price between the average bid offered and the bid accepted.
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