Yellow Sheets

Written By:
Paul Tracy
Updated August 5, 2020

What are Yellow Sheets?

Similar to the Pink Sheets, the Yellow Sheets are information about the prices of corporate bonds traded on the over-the-counter market (that is, bonds not listed on the mainstream exchanges).

How Do Yellow Sheets Work?

The Yellow Sheets disseminate information to market data vendor terminals and websites to subscribing customers. Among other things, the information contains bid, ask, high, low, closing prices and volumes, yields, and telephone numbers for market makers of particular securities.
 

Why Do Yellow Sheets Matter?

Small companies that may not meet the listing requirements for their securities to be listed on national exchanges might turn to the Yellow Sheets as an alternative. However, because these companies do not meet listing requirements, they are often considered riskier bonds and are less actively traded than bonds listed on national exchanges. Thus, the bid/ask spread is often larger for bonds on the Yellow Sheets.

It is important to note that the Yellow Sheets are not a trading platform or exchange. Rather, Yellow Sheets securities are traded by a network of market makers who enter quotes and trades through a closed computer network that can be accessed by subscribers.