facebookDoes it mean that it is a good time to buy a bond when it is selling at a premium? - Seedly

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Anonymous

23 Nov 2019

General Investing

Does it mean that it is a good time to buy a bond when it is selling at a premium?

Discussion (2)

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Kelly Trinh

23 Nov 2019

Backoffice technical at financial services firm

If by "selling at a premium" you mean when the bond is trading above par (so above 100) - then no, the fact it is above/below par is not a useful indication of the 'goodness' of a bond. The value of a bond moves around depending also on interest rates and so if the yield curves have shifted downwards since a bond was issued then it would naturally trade above par....

Hello!

Whether it is a good time to buy a bond is not determined solely on whether it is being sold at a premium. There are other factors that would affect whether you would want to buy the bond such as the expectation of interest rates a well as the credit worthiness of the bond itself. Hope this helps!

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