I'd be keen to know more about the mechanics of buying and selling bonds in secondary markets. I guess the price of it is affected by how interest rates have changed over time, the elapsed time since the bond was issued, how many coupons have been paid and the face value? assuming supply / demand flows are constant to simplify things.
Also stupid question, I assume when you buy a bond you're basically paying for its face value, which could be more or less than when it was first issued based on the previous factors ?
Thank you for the wonderful feedback, extremely valid questions. as for the secondary market for bonds and what effects the price I plan on explaining it much more in depth in part 2 or 3. (you’re pretty much right on with your analysis on what changes bond prices.
And yes you pay the current market value of the bond when purchasing in the secondary market, which as you said can be lower or higher.
Fantastic piece. It is easy to read, and thanks for breaking a complex subject down.
thank you so much for the kind words! I also appreciate the feedback
Great work!!
I'd be keen to know more about the mechanics of buying and selling bonds in secondary markets. I guess the price of it is affected by how interest rates have changed over time, the elapsed time since the bond was issued, how many coupons have been paid and the face value? assuming supply / demand flows are constant to simplify things.
Also stupid question, I assume when you buy a bond you're basically paying for its face value, which could be more or less than when it was first issued based on the previous factors ?
Thanks!!!
Thank you for the wonderful feedback, extremely valid questions. as for the secondary market for bonds and what effects the price I plan on explaining it much more in depth in part 2 or 3. (you’re pretty much right on with your analysis on what changes bond prices.
And yes you pay the current market value of the bond when purchasing in the secondary market, which as you said can be lower or higher.
I hope that helped!