Debt/Bonds Question
Can you short a bond?
Asked by Creezy in
Debt/Bonds
8 months ago
Answers
593 points
RobSmith answered 8 months ago …
Yup! It's the same as a stock - you borrow the bond from your broker, sell it, and then hope it declines in price so you can buy it back cheaper -- Same as a stock.
Only thing is, with falling interest rates, I wouldn't be looking to short any bonds right now :)
246 points
engcomp answered 8 months ago …
True, falling interest rates lead to higher bond prices. But when there is a risk that the bond does not repay 100c/$, the formula doesn't apply.
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