Cum Coupon

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DEFINITION of 'Cum Coupon'

A bond status that means the buyer of the bond has the right to receive the current coupon payment on the bond. Cum-coupon bonds require the buyer to pay the seller the accrued interest on the bond, and the buyer is then entitled to the next coupon. In the United States, bonds are always traded cum-coupon although there are a few markets outside of the United States where they are traded ex-coupon.

BREAKING DOWN 'Cum Coupon'

If an investor is looking to buy a bond they should be aware of the status of the coupon. If the bond is cum-coupon, that investor can be rest assured that the upcoming coupon will be paid to him. If the bond has a gone ex-coupon, the investor will not be receiving the upcoming coupon payment.

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