Any tips for selling brokered CDs?

[4legsgood]

I'm seeing better rates for cd's outside tdameritrade and I'm thinking maybe I should sell a cd I recently purchased from tda and transfer the money to a bank to buy a cd directly. I went through the motions to sell on the tda website, but it never offered me a 'limit order' type price, wuh? I called tda and the person could not give me an answer for how I can know in advance how much I'd be getting for the cd. Maybe tomorrow a fixed income person can tell me better, but I'd love to hear any info on this from an unbiased person here.
Thank you!

 

[COcheesehead]

Maybe you are trying to sell it outside market hours. Try again during trading hours tomorrow.

 

[4legsgood]

Will do...

 

[njhowie]

Different brokers have different ways in which they implement buying/selling CDs on their platform.

With Fidelity, if there is already an offer from a dealer attempting to sell the same CD, you are free to enter a limit price that you want to sell at, which could be higher or lower than the existing one(s). You can also set the order as Fill or Kill (which allows it to be live up to 20 minutes to fill or automatically cancel), or good for the day. However, if there is not currently another offer to sell the same CD, you are not given the opportunity to set a limit price - you are submitting a request for bid, which Fidelity allows the dealers on their platform to make bids on, then they will forward you the best of the bids and you can decide to either accept or reject it. Merrill Edge works similarly.

When you were putting together your order, did it say that you were requesting a bid? If it was letting you do this during non-market hours, my guess is that it was - otherwise it should not be letting you get far enough to place the order.

Update: I just went in to my TD account to the CD page, and on the Sell tab it is a template for requesting a bid and so the process is similar to Fidelity discussed above. You submit the bid request, within an hour or two later you will receive notification of the results of the bidding process and depending on the best bid you can decide to either accept and sell, or reject/ignore and keep your CDs.

 

[4legsgood]

...
Update: I just went in to my TD account to the CD page, and on the Sell tab it is a template for requesting a bid and so the process is similar to Fidelity discussed above. You submit the bid request, within an hour or two later you will receive notification of the results of the bidding process and depending on the best bid you can decide to either accept and sell, or reject/ignore and keep your CDs.

This worked exactly as you described today, thanks, avoided a painful phone call.

 

[Spock]

Parallel question: when selling a brokered CD, how close is the price received to the "market value" shown in your portfolio balance prior to sale?
Fido is claiming my CDs are worth 12K more than I paid for them. Just curious how much of that I can expect to actually get.

 

[jetpack]

I'm curious what info they give you about the sell price? Are they quoting you something like $99.00 as in 99 cents on the dollar? OR are they giving you the equivalent interest rate? For example buying CD's in Vanguard, you can see the spread between Buy and Sell. For me it's crazy, like you might be able to buy a CD with a yield of 2.5%, but if you want to sell it, you're giving up a yield 4%. It very well might not be worth it for you to move your CD.

 

[njhowie]

I'm curious what info they give you about the sell price? Are they quoting you something like $99.00 as in 99 cents on the dollar? OR are they giving you the equivalent interest rate? For example buying CD's in Vanguard, you can see the spread between Buy and Sell. For me it's crazy, like you might be able to buy a CD with a yield of 2.5%, but if you want to sell it, you're giving up a yield 4%. It very well might not be worth it for you to move your CD.

In the Fidelity case I described, if there is already an offer out there and you are submitting your sell (or buy), you can specify either the price or the yield and it will convert to the equivalent price.

 

[4legsgood]

results

TDA showed my cd value with a tiny bit of a gain (bought it a couple days ago) and the one bid is for 99.95 on the dollar.

Thinking about it...

 

[njhowie]

Parallel question: when selling a brokered CD, how close is the price received to the "market value" shown in your portfolio balance prior to sale?
Fido is claiming my CDs are worth 12K more than I paid for them. Just curious how much of that I can expect to actually get.

The "Third Party Price" Fidelity quotes in your portfolio nightly is the Mark to Market. When requesting a bid, you can generally expect to receive somewhat less than the quoted Third Party Price as the dealers are looking to immediately turn around, add a mark up, and sell for a profit. However, it is possible to be offered higher. It's happened to me over the past several weeks with municipal bonds. If you have some long-dated non-callable CDs you may also entertain bids for them higher than what the current price in your portfolio indicates.

Go see if your CD is being offered for sale currently. If so, you'll have an idea. If not, just go and click the button to sell from your portfolio, request a bid, and see what comes back - you are under no obligation to accept.