In these videos about bond trading, you’ll be given a broad understanding of the bond market.
Introduction to bonds
Here we look at those people and institutions that issue bonds as well as what bonds are actually used for.
How is a bond structured?
Here we describe what happens when a bond first comes into existence. This is called the bond’s ‘issuance’ and there are a number of decisions that have to be made around this process. We'll look at how bonds are structured to make them attractive to investors and how the end-to-end process works.
The price of a bond (part 1)
Here we talk about bond trading in the 'secondary market'. This is the place in which all bonds trade once the initial primary market issue has taken place. It is in this secondary market that the price of a bond is important for bond investors. We need to understand the quoted price for a bond known as the clean price. And in this first topic, we begin by showing you how to calculate the cash equivalent of the clean price of the bond. We’ll also explain why the investor pays the ‘dirty price’ for a bond rather than just the clean traded price.
The price of a bond (part 2)
This second video on bond prices will explore the primary market factors that can cause prices to change.
The idea is to give you the ability to assess why a particular bond price has changed and what might cause it to change in the future. Changes in bond prices will always have an immediate effect on your bond trading profits and losses so you’ll need to be aware of these factors.