Bonds Comparison

Bonds are financial instruments which are traded in the stock market. These bonds are essentially loans investors give to companies. After the maturity date of the bond, they are repaid in full.

Each bond has a yearly interest rate that is paid to the investor. This interest rate is usually paid to the investor twice a year. Different types of bonds exist, such as government or municipal bonds.

A bond is purchased at a set price with a set interest rate. Once purchased, the market determines the price from there forward. The market prices of bonds are greatly affected by interest rates.

These are the interest rates of bank loans, mortgages and savings. If the interest rates decline, bond prices increase and vice versa. Many things affect the rate of bonds and can influence traders.

Spreads on Bonds

Firms offer quotes on bonds as well as other financial instruments. Quoted spreads can be found on many major international bonds. These are UK Gilts, the US Treasury Bond, and German Bunds.

Betting firms know they must be competitive in all their spreads. This is to persuade investors to become active betting clients. Spreads on bonds are no different and thus are competitively priced.

When looking at bond spreads, most are within a point or two. The spreads on BOBL and the German bund show a small difference. It shows a difference of no more than two points from some firms.

Major differences are seen when comparing spreads on Treasury bonds. The differences on these bonds are evident in the multiple contracts.

The 5 year and 10 year bond have wide spread differences of 4 to 8. The 30 year bond is a bit better with only a difference of 2 points.

Bonds and Stake Sizes

It is important to look at the minimum stake size for bond spreads. Most firms allow a minimum stake size of £1 on all instruments. Bonds are different and firms are stipulating the minimum stake size.

For example, IG Index, the oldest spread betting firm, has a minimum. This betting firm requires at least a £2 or £3 stake size on bonds.

As with any financial instrument, market prices are subject to change. They can change on a daily basis due to a variety of factors. It is important to compare bond spreads with the different companies.

Share and Enjoy :

Sign Up With Us Today

Sign up with our system that aims to make 160%* per year & take advantage of our proven spread betting system.

Comments & Ratings