Bond trading strategies book

bond trading strategies book

one group of bonds to purchase another group, to take advantage of expected changes in the bond market, either to seek higher returns or to maintain the value of a portfolio. Also, have a look. However, if the safety margin declines to 0, then active management ends and only the immunized bond portfolio is maintained. Dedicated and active (For more on bonds, read our. The cases include topics on the 9/11 catastrophe, subprime loans, bankruptcy of a major airline etc.

There is also a demonstration on the overwhelming dependence of municipal securities pointing out particular market sector which can yield fruitful rewards with the proportionate existence of risks. The author who are a couple in real life have demystified the stocks superior investment returns and propose an all-bond portfolio as a definite strategy ensuring positive returns. Afterwards, a specific strategy must be selected that best achieves tracking an index, given the resources of the bond fund.

A total return analysis or horizon analysis is conducted to evaluate several strategies using bond portfolios with different durations to see how they would fare under different interest rate changes, based on expected market changes during the investment horizon. (To learn more about options, read our. There is a call feature in the bonds' covenants that allows the lender to call (recall) the bonds if rates fall enough to reissue the bonds at a lower prevailing interest rate. Bond strategies can be classified as active, passive, hybrid. Get this book #7 The Handbook of Municipal Bonds by Sylvan. Treasuries when the Federal Reserve is expected to increase the money supply, which it usually does by buying Treasuries. Hence, to earn a 6 return with a coupon bond, the coupons must be reinvested for at least the 6 rate.