Why does Anyone Buy Negative Interest Bonds?

[Picaro]

Yeah right, says the guy who can't figure out why negative interests rate central bank bonds are well over a $7 trillion dollar market now. Yawn.

can't figure out why negative interests rate central bank bonds are well over a $7 trillion dollar market now.

I already explained why. Banks buy them to make their capital requirements.

Hey, did you ever figure out how a bond has a negative yield if it doesn't trade above par?

Unless you're going to run away again? LOL!

You still don't get it. When you buy a bond and there is a rally in bonds like we had globally starting in november you make a SUBSTANTIAL profit, much more than the little -0.25% that the bund has...

This is why people buy bonds with negative rates, because they think they will go more negative, and thus make a big profit.

View attachment 270738

When you buy a bond and there is a rally in bonds like we had globally starting in november you make a SUBSTANTIAL profit,

Depends on the maturity, of course.

View attachment 270739

Looks like the 10 year Bunds had a positive yield in November.

much more than the little -0.25% that the bund has.

You send a check to the German government every year to pay them 0.25%?

Bond Yield Vs. Price
As bond prices increase, bond yields fall.

You definitely don't understand bonds. as the yield on the Bund drops to -0.25% the PRICE of the bond increases. This is the basics of bonds, you really have no clue what is going on here. You need to study bonds if you don't know that the yield falls when the price increases then that is why you have no clue what is going on here.


To be honest you just showed everyone how clueless you are right here, not knowing that price increases as yields drop. If you buy a bond and the yields drop your bond is suddenly worth more because it has a 0.25% coupon, when they are currently selling for -0.25%. understand.

You are lucky to have met me, now you have learned something.

You definitely don't understand bonds. as the yield on the Bund drops to -0.25% the PRICE of the bond increases.

You mean the Bund trades above par? Don't tell Picaro. LOL!

You are lucky to have met me, now you have learned something.

View attachment 270740

Teach me more about your claim that a bond trading at 90 can have a -1% coupon.

You know what a coupon is, right?

Here is an example of someone who is clueless on a topic, and goes Google Scholaring and cut and pasting in an attempt to save face, and still gets it wrong, even after googling and having it explained in plain English to them.

 

[Toddsterpatriot]

can't figure out why negative interests rate central bank bonds are well over a $7 trillion dollar market now.

I already explained why. Banks buy them to make their capital requirements.

Hey, did you ever figure out how a bond has a negative yield if it doesn't trade above par?

Unless you're going to run away again? LOL!

You still don't get it. When you buy a bond and there is a rally in bonds like we had globally starting in november you make a SUBSTANTIAL profit, much more than the little -0.25% that the bund has...

This is why people buy bonds with negative rates, because they think they will go more negative, and thus make a big profit.

View attachment 270738

When you buy a bond and there is a rally in bonds like we had globally starting in november you make a SUBSTANTIAL profit,

Depends on the maturity, of course.

View attachment 270739

Looks like the 10 year Bunds had a positive yield in November.

much more than the little -0.25% that the bund has.

You send a check to the German government every year to pay them 0.25%?

Bond Yield Vs. Price
As bond prices increase, bond yields fall.

You definitely don't understand bonds. as the yield on the Bund drops to -0.25% the PRICE of the bond increases. This is the basics of bonds, you really have no clue what is going on here. You need to study bonds if you don't know that the yield falls when the price increases then that is why you have no clue what is going on here.


To be honest you just showed everyone how clueless you are right here, not knowing that price increases as yields drop. If you buy a bond and the yields drop your bond is suddenly worth more because it has a 0.25% coupon, when they are currently selling for -0.25%. understand.

You are lucky to have met me, now you have learned something.

You definitely don't understand bonds. as the yield on the Bund drops to -0.25% the PRICE of the bond increases.

You mean the Bund trades above par? Don't tell Picaro. LOL!

You are lucky to have met me, now you have learned something.

View attachment 270740

Teach me more about your claim that a bond trading at 90 can have a -1% coupon.

You know what a coupon is, right?

Here is an example of someone who is clueless on a topic, and goes Google Scholaring and cut and pasting in an attempt to save face, and still gets it wrong, even after googling and having it explained in plain English to them.

You figure out how a bond can have a negative YTM without trading above par?

LOL!

Moron.

 

[The Banker]

Yeah right, says the guy who can't figure out why negative interests rate central bank bonds are well over a $7 trillion dollar market now. Yawn.

can't figure out why negative interests rate central bank bonds are well over a $7 trillion dollar market now.

I already explained why. Banks buy them to make their capital requirements.

Hey, did you ever figure out how a bond has a negative yield if it doesn't trade above par?

Unless you're going to run away again? LOL!

You still don't get it. When you buy a bond and there is a rally in bonds like we had globally starting in november you make a SUBSTANTIAL profit, much more than the little -0.25% that the bund has...

This is why people buy bonds with negative rates, because they think they will go more negative, and thus make a big profit.

View attachment 270738

When you buy a bond and there is a rally in bonds like we had globally starting in november you make a SUBSTANTIAL profit,

Depends on the maturity, of course.

View attachment 270739

Looks like the 10 year Bunds had a positive yield in November.

much more than the little -0.25% that the bund has.

You send a check to the German government every year to pay them 0.25%?

Bond Yield Vs. Price
As bond prices increase, bond yields fall.

You definitely don't understand bonds. as the yield on the Bund drops to -0.25% the PRICE of the bond increases. This is the basics of bonds, you really have no clue what is going on here. You need to study bonds if you don't know that the yield falls when the price increases then that is why you have no clue what is going on here.


To be honest you just showed everyone how clueless you are right here, not knowing that price increases as yields drop. If you buy a bond and the yields drop your bond is suddenly worth more because it has a 0.25% coupon, when they are currently selling for -0.25%. understand.

You are lucky to have met me, now you have learned something.

You definitely don't understand bonds. as the yield on the Bund drops to -0.25% the PRICE of the bond increases.

You mean the Bund trades above par? Don't tell Picaro. LOL!

You are lucky to have met me, now you have learned something.

View attachment 270740

Teach me more about your claim that a bond trading at 90 can have a -1% coupon.

You know what a coupon is, right?

IT wouldn't it would be over 100, I mistyped. The point is that it doesn't matter you buy at 110, and sell at 125 as rates go even more negative, and make a big profit. That is why people are buying them. The negative coupon is priced into the asset and the asset still increases in value

 

[Toddsterpatriot]

can't figure out why negative interests rate central bank bonds are well over a $7 trillion dollar market now.

I already explained why. Banks buy them to make their capital requirements.

Hey, did you ever figure out how a bond has a negative yield if it doesn't trade above par?

Unless you're going to run away again? LOL!

You still don't get it. When you buy a bond and there is a rally in bonds like we had globally starting in november you make a SUBSTANTIAL profit, much more than the little -0.25% that the bund has...

This is why people buy bonds with negative rates, because they think they will go more negative, and thus make a big profit.

View attachment 270738

When you buy a bond and there is a rally in bonds like we had globally starting in november you make a SUBSTANTIAL profit,

Depends on the maturity, of course.

View attachment 270739

Looks like the 10 year Bunds had a positive yield in November.

much more than the little -0.25% that the bund has.

You send a check to the German government every year to pay them 0.25%?

Bond Yield Vs. Price
As bond prices increase, bond yields fall.

You definitely don't understand bonds. as the yield on the Bund drops to -0.25% the PRICE of the bond increases. This is the basics of bonds, you really have no clue what is going on here. You need to study bonds if you don't know that the yield falls when the price increases then that is why you have no clue what is going on here.


To be honest you just showed everyone how clueless you are right here, not knowing that price increases as yields drop. If you buy a bond and the yields drop your bond is suddenly worth more because it has a 0.25% coupon, when they are currently selling for -0.25%. understand.

You are lucky to have met me, now you have learned something.

You definitely don't understand bonds. as the yield on the Bund drops to -0.25% the PRICE of the bond increases.

You mean the Bund trades above par? Don't tell Picaro. LOL!

You are lucky to have met me, now you have learned something.

View attachment 270740

Teach me more about your claim that a bond trading at 90 can have a -1% coupon.

You know what a coupon is, right?

IT wouldn't it would be over 100, I mistyped. The point is that it doesn't matter you buy at 110, and sell at 125 as rates go even more negative, and make a big profit. That is why people are buying them. The negative coupon is priced into the asset and the asset still increases in value

The negative coupon is priced into the asset and the asset still increases in value

Negative YTM, not negative coupon. Sheesh.