Bond Trading: Basics and Strategies – An Analytical Overview
Bond trading represents a fundamental aspect of fixed-income investing, offering investors the opportunity to earn steady income while managing portfolio risk. Understanding the core principles and effective strategies for trading bonds is essential for both novice and experienced investors seeking to diversify their holdings. This article explores the fundamentals of bond trading, popular trading strategies, and the role brokers like Capital Trade Consulting Pte Ltd in facilitating efficient and secure bond market access. Understanding Bond Trading Basics Bonds are debt securities issued by governments, corporations, and other entities to raise capital. When investors buy bonds, they effectively lend money to the issuer in exchange for periodic interest payments (coupons) and the return of the principal amount at maturity. Key characteristics of bonds include: Face Value (Par): The amount the issuer agrees to repay at maturity. Coupon Rate: The fixed interest rate paid...