The yield curve is a graph that plots the yield (interest rate) of a security against its time to maturity. The yield curve is used by traders to predict future interest rates and by investors to choose between different securities. The term “riding the yield curve” refers to the strategy of investing in a security … Read more
A matrix trade is a type of fixed income trade where the trade is executed at a set of pre-determined prices, known as the matrix. The matrix is typically set up by the broker-dealer who is executing the trade, and will be based on market conditions at the time the trade is executed. The key … Read more
A non-marketable security is a type of investment that cannot be readily bought or sold on a stock exchange. These securities are often illiquid, meaning that they cannot be easily converted into cash. Non-marketable securities include things like privately-held stocks, bonds, and real estate. Are stocks non-marketable securities? No, stocks are not non-marketable securities. A … Read more
A treasury lock is a type of trade that is used to lock in the price of a security for a period of time. The trade is made by buying the security at the current price and then selling it at the same price at a later date. The trade is used to protect against … Read more
The Fixed Income Clearing Corporation (FICC) is a clearing house that provides clearing and settlement services for the majority of fixed income securities traded in the United States. FICC is a unit of the Depository Trust & Clearing Corporation (DTCC). FICC was created in 2003 as a result of the merger of the Government Securities … Read more
A negative bond yield means that the return on a bond is lower than the prevailing interest rate. In other words, if you buy a bond with a negative yield and hold it to maturity, you will lose money. This is because you will have to pay more for the bond than you will get … Read more
Master Notes Definition: A master note is a type of debt instrument that is used by issuers to raise capital by selling bonds to investors. Master notes are typically issued by large financial institutions and corporations. What are securities notes? A security note is a debt instrument that represents a loan made by an investor … Read more
A normal yield curve is a graphical representation of the relationship between interest rates and maturity dates. The normal yield curve is upward sloping, which means that longer-term debt instruments have higher yields than shorter-term instruments. The normal yield curve is also known as the “positive yield curve” because the yields on debt instruments increase … Read more
