Loading the player...

DEFINITION of 'Current Coupon Bond'

A bond with a coupon rate that is within 0.5\% of the current market rate. Current coupon bonds are typically less volatile than other bonds with lower coupons because the coupon rate is closer to that set by the market.

BREAKING DOWN 'Current Coupon Bond'

Because a current coupon bond is less volatile, it is also less likely to be called. It has implied call protection rather than an explicit call provision. Its inherent stability, however, also means that it won't offer as great of a return.

RELATED TERMS
  1. Coupon Rate

    The yield paid by a fixed income security. A fixed income security's ...
  2. Short Coupon

    A payment made on a bond within a shorter time interval than ...
  3. Zero-Coupon Bond

    A debt security that doesn't pay interest (a coupon) but is traded ...
  4. Bunny Bond

    A type of bond that offers investors the option to reinvest coupon ...
  5. Coupon Equivalent Rate - CER

    A alternative calculation of coupon rate used to compare zero-coupon ...
  6. Bond Washing

    The practice of selling a bond just before it pays a coupon payment ...
Related Articles
  1. Personal Finance

    Coupon Shopping: Clip Your Way To Savings

    Use coupons strategically to score big savings on everyday purchases.
  2. Investing

    Explaining the Coupon Rate

    Coupon rate is the stated interest rate on a fixed income security.
  3. Personal Finance

    6 Sneaky Ways Coupons Make You Spend More

    If you're hoping to save money by using coupons, watch out for sellers' strategies.
  4. Investing

    Why Do Companies Print Coupons?

    Coupons save customers money, but there's also a lot in it for the company.
  5. Personal Finance

    Couponing 101: Dos and Don'ts

    Coupon clipping isn't new, but it has gone digital. Find out how to use coupons to your advantage today.
  6. Investing

    What is a Premium Bond?

    A premium bond is one that trades above its face or nominal amount.
  7. Investing

    Risks To Consider Before Investing In Bonds

    Make sure you understand the risks associated with bonds before making an investment decision.
  8. Investing

    If I Buy A $1,000 10-Year Bond With A 10% Coupon, Will I Receive $100 Each Year?

    Investors can count on a fixed-income security paying them a certain amount of cash as long as the security is held until maturity and the issuer doesn’t default.
  9. Investing

    What is Reinvestment Risk?

    Reinvestment risk refers to the risk that a bond’s future coupons will have to be reinvested at a lower interest rate.
RELATED FAQS
  1. How does a bond's coupon rate affect its price?

    Find out how a bond's coupon rate influences its price, including the role of government-dictated interest rates and the ... Read Answer >>
  2. How does a bond's coupon interest rate affect its price?

    Find out why the difference between the coupon interest rate on a bond and prevailing market interest rates has a large impact ... Read Answer >>
  3. How do debit spreads impact the trading of options?

    Find out what it means when a bond has a coupon rate of zero and how a bond's coupon rate and par value affect its selling ... Read Answer >>
  4. What is the most common solvency ratios used in fundamental analysis?

    Learn about the difference between a bond's coupon rate and its yield rate, how the coupon rate influences market price and ... Read Answer >>
  5. How do interest rates affect a bond's coupon rate?

    Find out how the changes in the national interest rate affect the coupon rates of newly issued bonds and why coupon rates ... Read Answer >>
  6. How does the money from the interest on my bond get to me?

    When you buy a regular coupon bond, you are entitled to a coupon, which is typically paid at regular intervals, and the face ... Read Answer >>
Hot Definitions
  1. Majority Shareholder

    A person or entity that owns more than 50% of a company's outstanding shares. The majority shareholder is often the founder ...
  2. Competitive Advantage

    An advantage that a firm has over its competitors, allowing it to generate greater sales or margins and/or retain more customers ...
  3. Mutual Fund

    An investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities ...
  4. Wash-Sale Rule

    An Internal Revenue Service (IRS) rule that prohibits a taxpayer from claiming a loss on the sale or trade of a security ...
  5. Porter Diamond

    A model that attempts to explain the competitive advantage some nations or groups have due to certain factors available to ...
  6. Oligopoly

    A market structure in which a small number of firms has the large majority of market share. An oligopoly is similar to a ...
Trading Center