What Is TRACE and How Can It Help Me?
When securities are listed on a centralized exchange, such as the New York Stock Exchange or Nasdaq, transaction information such as price and trade history is readily available to investors through the exchange. But how can you get information about bonds and other fixed income securities that are not listed on a national securities exchange? Information about these securities, known as over-the-counter (OTC) debt securities, is provided by TRACE® -- the Trade Reporting and Compliance Engine®.
TRACE is FINRA's fixed income market real-time price reporting and dissemination service. TRACE brings transparency to the fixed income market by making accurate, reliable and timely data available to the public. Access to real-time trade data can help you gauge the quality of the order execution you're receiving from your broker-dealer. The detailed trade information provided -- including quantity, price, and other data points -- can help you evaluate whether you got a "fair" trade and price. Additionally, from a regulatory standpoint, such levels of transparency better enable regulators to monitor the market, pricing, and execution quality.
Introduced in July 2002, TRACE consolidates transaction data for all eligible corporate bonds. As a result, retail and institutional investors and market professionals can access real-time public transaction information about OTC activity in corporate bonds reported to TRACE by FINRA members.
Source Fool.com
