Bonds

Bonds - The price of a bond (part 2)

Level: Beginner / Length: 13 minutes

Following on from part 1, we now need to understand the market influences that can change the price of a bond. This second tutorial on bond prices will explore the primary market factors that can cause prices to change.


Several factors affect bond prices and we’ll explain these in this module

Are there differences between government and corporate bonds?


The objective of the tutorial 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. 

We’ll explore:

  • Why bond prices change?
  • Current interest rate or yield to maturity
  • Changes to interest rates
  • Liquidity premium

IMPORTANT INFORMATION

Please note that Saxo Academy is property of Saxo Bank A/S. The materials published on Saxo Academy should not be considered as financial, investment, tax, trading or other advice, or recommendation to invest or disinvest in a particular manner. SCML assumes no liability for any losses resulting from trading in accordance with a perceived recommendation or reliance on Saxo Academy materials. Following or replicating other traders involves risk. Past performance of a trader is not indicative of future results.