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Questions tagged [bonds]

Use this tag for questions that relate to debt instruments known as bonds. Generally, money is lent to governments or corporations that is paid back with interest.

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Understanding how bond prices change

I came across following statement regarding Indian debt funds in ValueResearch ebook: The RBI announced retracting ₹2 lakh crore of banking funds through a 14-day reverse-repo operation in January ...
Mahesha999's user avatar
0 votes
1 answer
96 views

How we earn from debt funds?

I was guessing how we earn from debt funds. I know the underlying bonds pay back interest. But I want to know how exactly we earn from debt funds. I know how NAV of the fund increases in decreasing ...
Mahesha999's user avatar
0 votes
1 answer
202 views

Are creditors and bondholders the same thing?

I read the following passages on investopedia: "Every company has a hierarchical structure of rights for the three main classes of securities that companies issue: bonds, preferred stock, and ...
Stan Shunpike's user avatar
1 vote
4 answers
534 views

How to compute the present value of a bond if the coupons aren't reinvested?

We know that the computation of the present value of a bond assumes that the coupons paid are reinvested at the yield rate. But, what if I don't reinvest the coupons? How can I compute the present ...
Chris's user avatar
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2 votes
1 answer
110 views

Would I lose principal if I bought a 2% 1-Year Bill for $103.0?

Would I lose principal if I bought a 2% 1-Year US Bill for $103.0 (1000 + 20 - 1030 = -10) ?
huab's user avatar
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2 votes
1 answer
155 views

Can I place limit orders (like limit, stoplimit, trailstop..) in bonds (treasury bonds, municipal and other types of bonds)?

Can I place sell limit orders (like limit, stoplimit, trailstop..) in US bonds (treasury bonds, municipal and other types of bonds)? or it is only market orders?
huab's user avatar
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1 vote
1 answer
118 views

Why would anyone buy an old treasury while it is regularly auctioned during the year?

Why would anyone buy an old treasury while the same treasury (for example 5 year note, two years note) is regularly auctioned during the year? I mean if the yield rise why to buy an older note ...
huab's user avatar
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2 votes
1 answer
120 views

Are there market makers in bonds market?

When I order to mkt buy/sell stocks in US primary markets it excuted in seconds. In bonds markets, especialy in US treasuries, if I order to sell my bond or to buy an old bond, could my mkt order last ...
huab's user avatar
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1 answer
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Does the retail investors buy treasuries for trading as main purpose?

The yields for treasuries are very low, it is not logic to hold a treasury for 30 years to get two percent every year, I'm a beginner so I wonder if buy bonds/notes and waiting the yield to fall and ...
huab's user avatar
  • 927
-2 votes
1 answer
112 views

If I bought one treasury bond for 100.0 ($1000), then its market price become 110.0, does my profit be $100?

If I bought one treasury bond for 100.0 ($1000), then its market price become 110.0, if I sold it, does my profit will be $100? and does all other bonds' profits (municipal, corporate, international.....
huab's user avatar
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2 votes
2 answers
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When the 5-Year Treasury Note's yield is up 10%, Which note exactly do they refer to?

The 5-year Treasury notes, for example, are issued multiple times during the year, everyone have its cusip number, when they say this note yield is up by 10%. Do they refer to the most recently ...
huab's user avatar
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1 vote
3 answers
194 views

Why bond ETF price rises over time?

I get that bond price can change depending on the current interest rate (since interest rate of the bond doesn't change). But if this were the only factor, price of the bond ETFs (like BND) would stay ...
maxc137's user avatar
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1 answer
112 views

How to discriminate among all the tickers associated with a single company?

While following Interactive Brokers (IBKR Mobile) Tutorial | From Zero to Hero on my iPhone, I noticed there are many options linked to a company. In the screenshot we see, looking for Tesla will give ...
ebepem's user avatar
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1 vote
0 answers
194 views

What does the bond issuer/company do when the bond is oversubscribed?

I'm a beginner, I see sometimes in news that a company issue bonds (1 million total issuance), but they received 3 million requests, what will they do with the two million excess ?
huab's user avatar
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1 vote
2 answers
76 views

Compute coupon of treasuries

How do you compute coupon starting from yield and price? Since yield is coupon / par, which is 2 / 100 in this case, would it just be yield * price, 0.01906 * (102 + 1 / 32) with the data below? ...
asdasd's user avatar
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0 votes
1 answer
289 views

How to invest in El Salvador bonds via fidelity

El Salvador bonds have gone down lately and I would like to invest in them. I use Fidelity to manage my 401k investment fund, but I can't find any symbol to invest in related to El Salvador bonds. Is ...
Rob's user avatar
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1 vote
2 answers
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Can a company rent stock shares instead of selling them?

I'm beginner in stocks. I know that public companies can sell their stock shares, but what about renting them for a period of time and getting them back? Are there any certain examples that a company ...
Reza Alizade's user avatar
6 votes
2 answers
457 views

Can someone explain the short-term pattern between time and bond prices

One of the factors that affect bond prices is time. There is a long term pattern and a short term pattern in this. According to my lecture notes they are: Long-term pattern The price of discount or ...
CountDOOKU's user avatar
-1 votes
1 answer
371 views

How often does the treasury department issue bonds and at what prices?

How often does the u.s treasury department issue bonds and at what prices? Does it issue bonds throughout the year with the same annual yield regardless of current bond prices in the bond market, as ...
huab's user avatar
  • 927
0 votes
2 answers
221 views

How can treasury bond ETF increase its value when the FED raises interest rates?

The theory about bonds say that when the interest rates raise, bonds value falls since today's bonds have a higher yield than yesterday's bonds. However, let's take the 2018-2019 period. The FED ...
Martel's user avatar
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1 vote
1 answer
208 views

Why would someone want to sell a bond for 50% less than what they paid?

I was looking on DeGiro and I saw some corporate bonds up for sale for very low amounts e.g. 34.11 and 52.00. Since the standard or baseline amount is 100.00 these bonds seem to be up for sale for 520 ...
user1261710's user avatar
1 vote
1 answer
56 views

How can I interpret this bond chart?

I am looking into buying a bond on DeGiro. I am new to this platform and to buying bonds. From what I understand, bonds are usually issued in multiples of 1k and have a coupon rate that is paid to you ...
user1261710's user avatar
10 votes
1 answer
2k views

Do x-year treasuries become y-year treasuries (x-y) years later?

My understanding is that treasuries can be bought and sold (which is what causes their changing interest rate because of their changing price). Since they aren't static/locked assets, does that mean ...
Runeaway3's user avatar
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0 votes
1 answer
141 views

Are U.S government bonds completely liquid?

In the event of a market downturn like 2008, could I liquidate them whenever I wanted to at good price on a retail stock broker?
Sean Taylor's user avatar
0 votes
1 answer
312 views

Calculating the cost basis on a tax free Zero Coupon Bond

A tax free zero coupon bond is issued with a yield to maturity of 3.5%. After some time, an investor buys the bond at 50. ( 50 cents on the dollar ). When he buys the bond, the bond has a yield to ...
Bob's user avatar
  • 1,711
6 votes
3 answers
2k views

Do bond funds have an inherent advantage over individual bonds within a portfolio?

Background: I am constructing a simple ETF portfolio consisting of 70% stocks and 30% bonds. Every three months, I will add money into the portfolio, and rebalance the portfolio to restore its 70/30 ...
Flux's user avatar
  • 17.1k
1 vote
0 answers
64 views

When inflation occurs, why do bonds no longer get cheaper as they sell off? [closed]

I thought that inflation drove down bond prices in general, but I read in "The Invisible Hands" by Steven Drobny that it is only when inflation rises that government financing becomes a ...
Sean Taylor's user avatar
1 vote
0 answers
50 views

Question about the premium from selling bonds

Suppose I bought a $1000 ten-year treasury note (2031) with 4% yield. After one year, the yield decreased to 1%. If I sell it, how much premium will I get? Will I get (3% * 1000)? If the calculation ...
huab's user avatar
  • 927
1 vote
1 answer
121 views

How can I benefit as an individual investor in bonds, from increasing of bond yield?

I'm a beginner, What do I benefit as an individual investor in bonds, from bond yields increasing ? If I bought a 10 years treasury bond at the beginning of this year with a yield of 1 and then it ...
huab's user avatar
  • 927
2 votes
1 answer
67 views

How can I find the price (not just the yield) of a treasury bond? [closed]

Sorry if this is a dumb question, but whenever I want to look up the US treasury bond, I can only find the historical chart for its yield. But how could I find its historical price ($1183.28 as in the ...
No One's user avatar
  • 165
1 vote
2 answers
233 views

How can a bond fund have a higher current yield than the bonds it contains?

I'm looking for a place to park funds for a 1-3 year period, which rules out stocks. I found SFHY, a short term corporate bond fund, which has a current quoted yield of 4.33% and a "YTD Daily ...
user avatar
0 votes
1 answer
48 views

Positive movement vs negative movement of bond market yield

In the example on this page, a yield was issued at a yield of 7.18% at the beginning of a year and was forecasted to have a yield of 6.8% at the end of a year. The resulting value gain from the ...
Aqqqq's user avatar
  • 161
1 vote
2 answers
78 views

Impact of rising interest rates on default risk of existing junk bonds?

When interest rates rise, we all know that Math shows that the value of a bond will drop, but that's not my question. Intuition says that there's an indirect risk, in that rising rates might hurt ...
RonJohn's user avatar
  • 50.7k
0 votes
1 answer
109 views

When a large company wants to issue bonds, it contracts with number of banks and consulting firms, why does it need all that?

When a large company wants to issue bonds, it contracts with number of banks and consulting firms, why does it need all that ? is this issue that complicated ?
huab's user avatar
  • 927
0 votes
2 answers
273 views

Why is the redemption value of a bond usually higher than the initial price of that bond?

I understand the redemption value of a bond to be the price an issuer of a bond has to pay in order to redeem a bond before its maturation. I also understand that the owner of the bond can redeem a ...
Bradley's user avatar
  • 65
0 votes
1 answer
75 views

Wash sale- Sell stock buy bonds?

If I sell stock of Company-X at a loss and immediately buy the bonds of Company-X, am I allowed to deduct any loss on the sale of stock on my taxes, ie would this be considered a Wash Sale?
public wireless's user avatar
1 vote
1 answer
81 views

How are sovereign bond interest rates determined? [closed]

They are a lot of questions about the price of a bond or its yield. How would bonds fare if interest rates rose? Why would I not buy a bond for less than face value? Why invest in long term ...
politinsa's user avatar
  • 111
1 vote
1 answer
92 views

Why does the price of a TIPS bond not match the inflation adjusted principal near or at maturity?

As stated by the US Treasury: With a rise in the index, or inflation, the principal increases. With a fall in the index, or deflation, the principal decreases. I'm curious why a TIPS (912828QV5) ...
Ilya Scharrenbroich's user avatar
3 votes
1 answer
162 views

Why short (German) government bond futures?

Today, mainly out of curiosity, I went to a major ETF comparison website and sorted the short ETFs by market value. I was surprised when among the first few places in the list I found an ETF (LYX0FW) ...
B K's user avatar
  • 824
3 votes
1 answer
129 views

Ask & Bid yield calculation problem

Does anyone know how the ask and bid yields are calculated on this corporate bond? I tried to use BEY calculation but I keep arriving at different answers. Does anyone know what the $500K means? If ...
Ron Jab's user avatar
  • 31
4 votes
4 answers
1k views

Why are bond ETFs typically recommended for diversifying into bonds?

It seems that the conventional wisdom on portfolio allocation suggests that one should include a bond component in one's portfolio. The usual way that people gain exposure to bonds is by buying a bond ...
Flux's user avatar
  • 17.1k
2 votes
1 answer
68 views

Bond Chart Prices and Very High Yields [closed]

Two questions on bonds: Why is finding stock prices and charts so easy whereas for corporate bonds is so hard? Do you know a good website like TradingView that does the same for corporate bonds (a ...
98418's user avatar
  • 21
2 votes
1 answer
167 views

Trying to understand the U.S. yield curve and global inflation

With the COVID crisis the FED has lower interest rates a lot: Now, inspecting the US yield curve: It seems to be that this is a normal curve that doesn't flatten too much at the end. Is this correct?...
Martel's user avatar
  • 1,281
3 votes
1 answer
167 views

Bond ETF vs stocks versus interest rates

I read that: stocks move in opposite direction of interest rates bond ETF prices move in opposite directions of interest rates bond ETF move in opposite direction of stocks But how can all three of ...
learningtech's user avatar
8 votes
3 answers
2k views

Are negative coupon bonds possible?

I am aware that negative yield bonds are possible (e.g. by selling a zero coupon bond at a price greater than par value). Are negative coupon bonds possible? I have not found any real-life examples of ...
Flux's user avatar
  • 17.1k
0 votes
2 answers
91 views

How do I price a convertible bond that has a callable feature?

A 10-year convertible bond with a somewhat high (compared to the current market) 7.5% per annum coupon interest rate was issued 5 years ago at par by Company XYZ, a highly-rated bond issuer. It ...
gemini's user avatar
  • 1
0 votes
1 answer
132 views

What is the effect of rising interest rates on a Bond Fund?

For Example: Assume you purchase $1,000 of a bond fund. If the bond fund has an average duration of 5 years and general interest rates increase 1% , what is the impact on the value of the bond. What ...
M Pearson's user avatar
0 votes
2 answers
110 views

Can I buy some US treasury bills or notes ETFs (3 month to 5 years) with very low risk from the EU?

Can I buy some US treasury bills or notes ETFs (3 month to 5 years) with very low risk from EU (want to buy it in EUR so I don't have to convert it - would this even be a problem?). Because EU bond ...
klemsi123's user avatar
1 vote
0 answers
36 views

BTP Bund spread interpretation

I know that the BTP/Bund spread is the spread between the German and Italian 10 year bonds. But I am unsure how we interpret the actual number and more importantly the drivers behind the spread ...
learningmathematics's user avatar
0 votes
1 answer
70 views

How to find information on bond buyers?

To better assess my bond investments, I want to see what institutions are buying US treasuries in the auctions over the last three months. Just want to see if there is any change in the composition of ...
Arash Howaida's user avatar

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