Without stocks and bonds, much of the world’s business activity would be impossible. Stocks and bonds are certificates that are offered in order to raise funds for the start-up or expansion of a business. Stocks and bonds are also referred to as securities, and those who purchase them are referred to as investors. What is […]

Bonds are purchased and sold in massive amounts in the United States and around the world. Some bonds are easier to purchase and sell than others, but that doesn’t stop investors from doing so almost every second of every trading day. Treasury and savings bonds can be purchased and sold using a brokerage account or

When the Fed buys bonds on the open market, it expands the economy’s money supply by exchanging bonds for cash to the general public. When the Fed sells bonds, it reduces the money supply by taking cash out of the economy and replacing it with bonds. As a result, OMO has a direct influence on

A Liberty Bond is a debt obligation issued jointly by the United States Treasury and the Federal Reserve. It was a war bond, sometimes known as a Liberty Loan, issued in four payments in 1917-18 to fund the United States’ participation in World War I and the Allied war effort in Europe. What is the

A rally is a period in which the prices of stocks, bonds, or similar indexes rise steadily. A rally is characterized by rapid or significant upward movement over a short period of time. This type of price action is called as a bull market rally or a bear market rally, depending on whether it occurs

To begin with, bond prices and interest rates fluctuate in opposite directions. When interest rates fall, a bond’s price rises, and when interest rates rise, a bond’s price falls. Second, longer-maturity bonds have much higher interest rate risk than shorter-maturity bonds. What happens if bond prices rise? Bonds have an impact on the stock market

Bonds are one way for businesses to raise funds. A bond is a type of debt between an investor and a company. The investor agrees to contribute the firm a specified amount of money for a specific period of time in exchange for a given amount of money. In exchange, the investor receives interest payments

Bonds are one way for businesses to raise funds. A bond is a type of debt between an investor and a company. The investor agrees to contribute the firm a specified amount of money for a specific period of time in exchange for a given amount of money. In exchange, the investor receives interest payments

With the release of The Massive Short, the big financial catastrophe finally gets its star turn on the big screen. The film, which is based on Michael Lewis’s New York Times bestseller of the same name, chronicles the story of six contrarian traders who foresaw the housing crisis before almost anybody else. Their intelligence allowed

Going short on bonds means an investor or trader believes bond prices will decrease and wants to profit from that adverse attitude – for example, if interest rates are predicted to rise. Bond derivatives, such as futures and options, are one way to short the bond market or hedge an existing long position against a