In finance and investing, the Yellow Sheets is a publication that provides information on corporate bonds. Specifically, the Yellow Sheets list bid and ask prices, yields, and other data related to corporate bonds.
The Yellow Sheets are published by the National Quotation Bureau (NQB), which is now part of the Financial Industry Regulatory Authority (FINRA). The information in the Yellow Sheets is used by bond traders, market makers, and investors to monitor market activity and make informed decisions about buying or selling corporate bonds.
The Yellow Sheets are important because they provide up-to-date and accurate information on the prices and yields of corporate bonds, which can be difficult to find elsewhere. The publication is typically released daily and includes data on a wide range of corporate bonds, from investment-grade bonds to high-yield bonds.
Corporate Bonds: The Yellow Sheets provide information on corporate bonds, which are debt securities issued by corporations to finance their operations or projects. These bonds typically have a fixed interest rate and maturity date, and are traded in the secondary market among investors.
Bid and Ask Prices: The Yellow Sheets list bid and ask prices for corporate bonds. The bid price is the highest price that a buyer is willing to pay for a bond, while the ask price is the lowest price that a seller is willing to accept for the same bond. The difference between the bid and ask prices is known as the bid-ask spread.
Yields: The Yellow Sheets also provide information on the yields of corporate bonds. Yield is the return that an investor receives on a bond, and is calculated as a percentage of the bond's face value. Yields are typically quoted as either the yield-to-maturity (YTM), which assumes that the investor holds the bond until maturity, or the yield-to-call (YTC), which assumes that the bond is called (redeemed) by the issuer before maturity.
Other Data: In addition to bid and ask prices and yields, the Yellow Sheets may also provide other data related to corporate bonds, such as the bond's credit rating, coupon rate, maturity date, and trading volume.
Importance: The Yellow Sheets are important for bond traders, market makers, and investors because they provide accurate and timely information on the prices and yields of corporate bonds. This information is essential for making informed investment decisions and managing risk in the bond market.
It's worth noting that while the Yellow Sheets are still used by some investors and market participants, electronic trading platforms and other sources of bond market data have become more prevalent in recent years. However, the Yellow Sheets remain a useful and widely recognized source of information for corporate bonds.