I need to know everything about Bonds....

[Shrutip]

Hello,

I tried finding out a separate forum for Bonds but couldnt find on traderji.
I wanted to know everything about bonds:
1) How can we trade in Bonds?
2) what are different types of bonds?
3) does its price also move just like stocks?
4) can we buy and sell Bonds just like stocks? or does it have a lock in period?
5) is it sold in units like shares or only a particular amount is to be paid like bank FDs?
6) are corporate bonds safe to buy?
7) what are junk bonds and A grade bonds?
8) how to find out which bond is better? how do we research it?
9) when is the interest paid on the bond?
10) Can i hold bonds in my demat account and can i trade in them through my broker?
11) if yes, what is normal brokerage charged on bond trading?

 

[vijayvaliya]

Hello,

I tried finding out a separate forum for Bonds but couldnt find on traderji.
I wanted to know everything about bonds:
1) How can we trade in Bonds?
2) what are different types of bonds?
3) does its price also move just like stocks?
4) can we buy and sell Bonds just like stocks? or does it have a lock in period?
5) is it sold in units like shares or only a particular amount is to be paid like bank FDs?
6) are corporate bonds safe to buy?
7) what are junk bonds and A grade bonds?
8) how to find out which bond is better? how do we research it?
9) when is the interest paid on the bond?
10) Can i hold bonds in my demat account and can i trade in them through my broker?
11) if yes, what is normal brokerage charged on bond trading?

1. trading in bonds (corporate) is possible through exchanges. For bonds issued by GOI and state govts generally traded by banks and FIs through RBI mechanisms.

2. many classifications can be made based on who is raising the debt.
bonds are instruments documenting the debt obligation of the debtor.
it can like soveriegn debt and corporate debt, or depending on the quality of the (creditworthiness of borrower) like A, B , C etc)

3. ya. prices move according to interest rate movements in economy.but the variation is not high compared to equity.

4. yes, lock-in is not necessary to be there, since it is a tradeable instrument.

5. traded in units.

6. safety is linked to credit-worthiness of the issuer. generally all bond issues are rated by rating agencies.

7. junk bonds are high interest yielding low quality (lower in creditworthiness) instruments. A, AA, AAA etc are different ratings assigned by the rating agencies.

8. go by the credit rating agency reports.

9. Interest is paid on bonds either annually, or quarterly, or half yearly. in case of zero coupon bonds interest is paid on maturity.

10. yes.

11. it depends on your broker.

 

[Fortantimme]

thank you for the list and info.

 

[soft_trader]

Which broker provides the facility of trading in bonds?

 

[mithoon]

Were you able to find any broker who provides the facility of trading in bonds?

 

[mailsu1973]

thank you for the list and info.

Which broker is better for trading in bonds?