Are larger trades more or less expensive to execute in bond markets than smaller trades? This is an old and unsettled question in the literature on financial markets. The aim of this blog post is to provide novel answers to this question, based on our recent research using transaction-level data from the UK government and corporate bond markets, over the period 2011–17.[1] What does previous research say about the size-cost relation? The existing empirical evidence shows that larger trades incur lower trading costs (‘size discount’) in various over-the-counter (OTC) financial markets such as the market for government ... (full story)