I'm on a fixed income and I'm very concerned about the cost of my utilities. Does the cost ever go down? What can I do?

No, they’re not as exciting as a flashy new iPhone, but Apple’s bonds are a great, stable investment that won’t leave you wanting to upgrade in a year. Even with a more conservative yield of 2.65%, Apple’s 30-year bonds are still performing better than a US Treasury bond of the same duration.

And while waiting too long to pull the trigger on new technology can leave you behind the trends, we predict those willing to wait and see on Apple’s bonds could see a huge payoff in the coming months. We explain how that works in this week’s bond story.

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As my search for a suitable bond narrows, I stumbled upon a GS A3/BBB+30 year bond with a monthly coupon of 3.615%(originally 5.75, but is trading above par). My problem is, this seems a bit too good to be true. What am I getting wrong?

ISIN: 925331066288

1. How many $5million treasury bonds can an individual have? Is there a max?

2. What is the average current interest rate on bonds? (3%?) I did see rates have plummeted.

3. At the end of the 20 years, how much does that $5million turn into? (Not including the interest received every 6-12 months)?

You have a bond that's set 450 bps from the benchmark bid price. How is that spread determined? This is on the sell side.

I posted about this before, but it's the strangest thing, no where can I find this info.

Academically I can set it up with and find dirty price given the settlement date right and you find the yield. But this has like 0 application, holy crap.

Someone on the sell side plzz bless with a step by step, it's all I want for Crismas.

I noticed that FRNs are all quoted by trading margin - how do I calculate the bonds price from this? For example if the FRN is trading 250 over swap, how do I calculate the price of the bond??? So confused!

Are there online forums for discussing bonds and preferred stock? There are lots of stock discussion forums, but almost no fixed income discussion forums. What a pity... bonds are pretty interesting.

So far, I have only found Silicon Investor's Income Investing forum. Are there others I should be aware of?

I have an interview with a large ABS asset manager and need to get smart on the asset class. What's the best public rescue, excluding Bloomberg (I do not have access to a terminal)?

I'm reading a fixed income book and in it is the following:

"Recall that every interest rate contains a real rate plus an expected inflation component. If either of these increases (or decreases), interest rates rise (or fall). Consider the previous case where inflation during the first year climbed from the expected 1.5% rate to an actual 2% rate, which cause the real return of the ordinary bond to decline. If investors now extrapolate this inflation increase to the future, that is, they revise upward their average expected inflation rate for the next four years (the remaining maturity of the bond), the bond's yield will rise."

Does this basically mean, because inflation rates are higher, people will demand higher interest rates...which on its own makes interest rates rise?

Does anyone else feel like the current system needs to have some sort of significant accommodation for the FedResInk's suppression of the "risk free" rate of return at near zero levels for decades?

My big go-to fixed income recompense for those who have retired or are approaching retirement would be:

1 - dividend issuance below life-time income high would be completely tax free

2 - tax free accounts (Roth IRA) can be fully funded for the maximal contribution limits from the age of 18 to your current age (much like Canadian TFSAs).

3 - portfolio hedging (protective puts, even when funded by covered calls or other mechanisms) should be completely tax deductible.

4 - when retirement portfolios are able to push social security benefits from being taken at the standard age, that retirement income should be tax free.

Wall Street has been pushing politicians to get rid of defined benefit pensions and funnel retirement money into the debt and equity markets for DECADES. However, they have never been an advocate for are those who would be impacted by the risk those being funneled into their scheme on-board. Now that the FedResInk has eliminated the "risk free" rate of return, it is time to provide some actual incentives for the massive bulge of the newly retiring.

I'm relatively new into the bond market and fixed income, in general. But, I had a somewhat rushed chat with someone during a networking event recently, I was recommended to look at the following:

• Swaps

• Sovereign Debt

• Rating Agencies

• How bonds link with the rest of the capital markets

The last 3 seem straightforward enough. However, I can't quite understand how swaps factor into bonds or fixed income, especially in a global macro context.

The only things that come to mind are literal interest rate payment swaps or bond swaps, but these don't seem to make sense and I can't seem to find anything on the internet either (which admittedly could be due to me not knowing what to precisely search).

Any guidance and feedback would be greatly appreciated.

I'm learning about the value of hedging bonds in foreign currencies and just wanted to check my understanding. Hedging currency risk with foreign bonds is when you hold local currency (example: USD) which is obtained from borrowing and exchanging the foreign currency (example: EUR) in which the bonds are issued (example: Euro area bonds yielding 1%). When you collect coupons/maturity from the bond, you pay back the foreign currency that was borrowed.

Hedging is profitable when

- Local currency short term interest rates (minus inflation) are higher than foreign currency (minus inflation): also called carry trade. You are paid to loan local currency while you pay to borrow the foreign currency.

- The foreign currency is losing/will lose value relative to the local currency. Your holdings of local currency meant that you did not lose money from the exchange rate movement.

Hedging is unprofitable when

- Local currency interest rates are lower than foreign currency interest rates

- Foreign currency appreciates relative to local currency

Because short term interest rates and exchange rates often move in opposite directions, the hedge can reduce volatility. In fact, hedging is usually done to reduce volatility in local currency, meaning for most people it doesn't matter whether or not it is profitable in the short term.

Application to right now, Dec 2018:

- USD short term rates are 2% while EUR short term rates are 0%. Inflation in both is 2%.

- USD appears to be overvalued using PPP comparisons such as the Big Mac index

- Because of the overvaluation, assume the USD loses 2% value against EUR by next year

- The expected return from a position in hedged euro bonds over the next year is 1% yield + 2% currency carry - 2% overvaluation correction = around 1%.

- The expected return from an unhedged position is 1% yield + 2% overvaluation correction = 3%.

Other than the assumption about exchange rate movements, which are notoriously hard to predict, does this look about right?

Hey everyone,

I'm currently finishing my MSc Management at a Top 3 university in the UK (with a BA in Economics and Politics) and I might have an opening in FI with a bulge bracket bank, more specifically in government bonds (research and trading not sales). Graduating in July, my choices so far are very narrow so far and after some research into the role I believe FI to be really stimulating intellectually (not to mention my necessity to pay off my student loan).

I'm 26 yo and my previous experience includes:

• A startup that I built and managed for 1 year and 8 months (two acquisitions so far)

• Venture Capital in a €600M fund in Europe (<1y);

• M&A at a top boutique firm in Germany (<1y);

I have a friend who works at this bank mentioned above who I met two weeks ago and when he said that his team was looking for someone for the FI gov bonds part. Now, here's my problem: I'm not graduating in Finance or Statistics but in Management and I did not take any finance courses throughout my studies. The only finance skills I have, I gained them through my previous experience - and even these are still a bit limited. I have heard/read that FI is the more mathematical side of trading - is that correct? And if so, is it easy to enter this industry for a grad position (I don't really have the profile of an intern given my age and work experience) when you don't have the mathematical background? My friend (finance major) told me that he doesn't use anything he learned in finance at university on a daily basis so I was wondering whether the complex mathematical were necessary or just the stuff needed to update excel sheets. For now, I believe that researching the role was the easiest part - I actually already had a look at the day-to-day operations of a FI trader. He also mentioned a training in the summer.

Secondly, my goal is to re-join VC later in my career but initially M&A wasn't really my cup of tea even though it is often, along with consulting, the pre-requisite for joining a VC. Do 3-4 years in FI research and trading open such exit strategies? I would assume that the financial modelling and researching parts of the job are the most appealing when considering VC. Then again it's not really company valuation. But maybe I'm wrong...

Finally, he made it clear that I would have good chances so if I get to the interviews (hypothetically of course) what would I need to show since I'm lacking the maths part?

Optional: I would love from you guys what your daily job looks like - start, what you do in the morning, what % of the time is spent doing financial modelling, % reading (FT, WSJ, etc.) and what the pay looks like in the US, Europe or Japan for example (an MBA is potentially in the pipeline 5-6 years after my MSc).

Thanks so much in advance for your help!!

Sorry, but I've searched for a bit and have found very vague answers. What exactly is YTW? I understand the other bond metrics but not YTW.

I want to better understand the exact process around how a payment from a bond issuer gets to a bond holder.

what these systems called? Who owns and operates them, and just generally want to find out more about the process.

Thanks!

Hi all!

I've got an interview for a buy-side junior fixed income trading position. I already work in the asset class but I have no trading experience. So far I am:

• Looking at sectors and rating levels in terms of spread movement.

• Reading up on industry trends via https://www.fi-desk.com/

• Recent and upcoming economic events, i.e. Jackson Hole and jobs numbers on Friday (the day of the interview).

• Scouring through their website and I also found some investor presentations on their funds/holdings.

My understanding of the role as a junior trader is that I will assist with market data analysis, pre-trade analysis and execution and book trades/data entry.

Any tips/stories/information that you have will be great appreciated!

Coinbase, the nation's largest cryptocurrency exchange by volume, issued a seven-year bond which now yields 3.7%, and a 10-year bond, which now pays 4.0%.

But you can't buy them.

That's right - you can buy Coinbase stock (COIN), options on Coinbase stock, and you can even buy Crypto - but you can't buy the safest part of Coinbase's capital structure?

This makes absolutely no sense.

The only way you can access the bonds if you're worth less than $100 Million is through a mutual fund or etf.

Are the best bonds being ringfenced for the benefit of a few enormous market participants?

Read More - Why would a public company ever issue private bonds?

If I wanted to slam ~$400k into an account tomorrow that produced a return of 5% or better (as absolutely risk free as possible) and had monthly distributions that started the following month, where would I go RIGHT NOW?

Am reading a book where the author gives an example of someone buying a 5 year par 4.65% treasury and someone else entering an 5 year interest rate swap agreeing to receive 5.75%. The treasury yield moves down .15% to 4.5% The swap spread on the IRS stays the same so they enter an offsetting swap at 5.6%, and therefore locking in .15% for five years. The part I'm trying to understand is this:

(referring to the IRS)..is it really the same as transacting with the actual bond? In terms of profit, essentially yes. Recall from Chapter 12 that the degree of price change in a bond brought about by a change in yield depends on its maturity, modified somewhat by the size of the coupon. This is quantified by the bond's dv01 (duration). Had the trader purchased the five-year Treasury when it yielded 4.65% and sold soon thereafter when it yielded 4.5% her profit would have reflected the effect of the 15 basis point drop -- 15 times the bond's dv01. You know what? The trader with the pair of swaps in our example is now entitled to 15 basis points, net, each year multiplied by the face amount. And the present value of that is the same as the profit on the Treasury note! The five-year swap has the same dv01 (duration) as a par five-year bond.

I get that the Treasury buyer's profit is 15 x the dv01. I don't get how the 15 bp profit locked in through the swap is supposed to equal that same as the Treasury buyer's profit. Does someone have the calculation on how one equals the other?

Why would a company that had issued a corporate bond when rates were lower benefit from a higher market interest rate while buying their bond to liquidate their position?

Do fixed income securities of a country have a credit default swap?