Puttable bond option

Posted: foma-piterskii Date of post: 21.07.2017

Puttable bond put bond, putable or retractable bond is a bond with an embedded put option. The holder of the puttable bond has the right, but not the obligation, to demand early repayment of the principal.

The put option is exercisable on one or more specified dates. This type of bond protects investors: Therefore, investors sell bonds back to the issuer and may lend proceeds elsewhere at a higher rate.

Bondholders are ready to pay for such protection by accepting a lower yield relative to that of a straight bond. Of course, if an issuer has a severe liquidity crisisit may be incapable of paying for the bonds when the investors wish. The investors also cannot sell back the bond at any time, but at specified dates.

However, they would still be ahead of holders of non-puttable bonds, who may have no more right than 'timely payment of interest and principal' which could perhaps be many years to get all their money back.

The price behaviour of puttable bonds is the opposite of that of a callable bond.

Put Bond

Since call option and put option are best way to make money in ultima online mutually exclusivea bond may have both options embedded. From Wikipedia, the free encyclopedia.

Accessed September 27, Sean Cleary and Charles P.

Overview - U.S. Global Investors

Jones, Investment AlternativesInvestments: Bond Debenture Fixed income. Agency bond Corporate bond Senior debt Subordinated debt Distressed debt Emerging market debt Government bond Municipal bond. Accrual bond Auction rate security Callable bond Commercial paper Contingent convertible bond Convertible bond Exchangeable bond Extendible bond Fixed rate bond Floating rate note High-yield debt Inflation-indexed bond Inverse floating rate note Perpetual dj sava moneymaker lyrics Puttable bond Reverse convertible securities Zero-coupon bond.

What is CALLABLE BOND? What does CALLABLE BOND mean? CALLABLE BOND meaning & explanation

Clean price Convexity Coupon Credit spread Current yield Dirty price Duration I-spread Mortgage yield Nominal yield Option-adjusted spread Puttable bond option bond Weighted-average life Yield curve Yield spread Yield to maturity Z-spread.

Puttable bond option security Collateralized debt obligation Collateralized mortgage obligation Commercial mortgage-backed security Mortgage-backed security.

Callable bond Convertible bond Embedded option Exchangeable bond Extendible bond Puttable bond. Commercial Mortgage Securities Association CMSA International Capital Market Association ICMA Securities Industry and Financial Markets Association SIFMA.

Putable Bond Definition & Example | Investing Answers

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puttable bond option

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