So what are bonds? Governments, municipalities and companies issue bonds to raise capital. All bonds have a nominal value, interest rate and maturity. They are purchased at face value by the issuer and he periodically pays interest to those who have made their investments in bonds.
The bond market is also known as the fixed income market. Financial instruments are called debt securities, hence investments in securities. The main advantage of investing in securities is that the bonds offer a fixed yield. Many government bonds are tax-exempt, which means that interest income is also tax-free.
Thus, bond investors enjoy a double advantage. In most cases, bond investments are used to diversify the portfolio and reduce or offset the risk. Meanwhile, bond investors can count on a fixed return on their investment.
Just as stocks and bonds are highly liquid. Some investors also choose to invest in the CFD of bonds, as this allows them to take advantage of small price movements due to the respective margin.
In addition, in CFDs, traders and investors do not have to wait for bonds to mature, as CFD trading is based on price fluctuations. Some of the most common CFDs of bonds are:
10-year Germany Bund Futures CFD (Bund)
10-year US Treasury Note Futures CFD (USTNotee)
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