Interest of Bonds?

Quote from EquityGuy4321:

You can google "poison put" to get more information on that.

Yes, according to Bloomberg the coupon can change in the event of a credit event. I think that is what Bob meant by variable.

As far as the relationship between coupon and yield, note that the bond is currently priced at 118. That means that from now until maturity, you will lose those 18 points, which will be offset by earning a higher coupon...8.5% as long as ratings don't change. The combination of the two means that, if nothing changes, you will earn around 1.8% on your investment.
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ohhhh now I get it.. it matures in three years. omg i didnt know that :eek: why is that information so obscured.

I googled poison put but I meant how do you get the poison put for the bond with this particular CUSIP??? So not what is a poison put but what is the poison put for my bond or for that bond and stuff or is this information not free?? that guy was pretty specific how did he get that info???
 
Quote from failed_trad3r:

ohhhh now I get it.. it matures in three years. omg i didnt know that :eek: why is that information so obscured.

I googled poison put but I meant how do you get the poison put for the bond with this particular CUSIP??? So not what is a poison put but what is the poison put for my bond or for that bond and stuff or is this information not free?? that guy was pretty specific how did he get that info???
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poison put should be last on your list of things to learn.
you have to read about par value, yield to maturity first.
btw-all this info is on finra page for this bond. including maturity date. dunno what exactly is "obscured".
 
Quote from Bob111:

poison put should be last on your list of things to learn.
you have to read about par value, yield to maturity first.
btw-all this info is on finra page for this bond. including maturity date. dunno what exactly is "obscured".
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poison put is more interesting I already understand everything else... I just have to sell my bond and buy one with higher maturity date like this one
http://cxa.marketwatch.com/finra/BondCenter/BondDetail.aspx?ID=MDIyMDlTQUUz

it expires in 2038 so should be safe!
 
Quote from Martinghoul:

I think these classify as the most famous last words out there.
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:D :D :D :D

failed forgot to add IF to that sentence..and it's a big f* IF
 
Quote from failed_trad3r:
yep, my debt is senior since it expires very late, so safe.
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Oh no! Pls tell me you didn't just say this... You need to think about what you're doing a little bit more, it appears.
 
Quote from Martinghoul:

Oh no! Pls tell me you didn't just say this... You need to think about what you're doing a little bit more, it appears.
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I've heard that if you purchase debt that's senior enough you can use your cusip number to get a discount on movie tickets:D
 
Marvelous 5 star thread in the making here. Brightened my day for sure.

A few random thoughts.

There is no correlation between the length of redemption period of a bond and how "senior" it is. You could have a bond expiring in a few years and it could very well be tops in the pecking order. There is also secured notes, unsecured notes, and subordinate notes.

When it comes to sub notes, you have to be really careful if you are buying speculative level debt. You can get hosed. However if the sub debt was someone like Pfizer or perhaps WalMart, you should be OK to sleep at night.

Also try to never pay a premium over par for your bonds. All its gonna do is drag down your effective yield. Especially if its mediocre quality debt. The only time I could see paying a significant premium, like in current market conditions, would be for a long term "A" level bond that you know is not going to be called and has a 7-8%% type coupon. A few companies that come to mind would be AT&T, IBM, and Pfizer.

The nice thing about bonds though is that if you are an investor, not a trader, its the most principle friendly vehicle you will find. Yes we all know that bond prices go up and down and are influenced by interest rates. But unlike stocks, your bonds at some point in time will be redeemed. So if you lock in at an effective yield that fulfills your objectives, that is all that matters.
 
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