Riding the Yield Curve

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DEFINITION of 'Riding the Yield Curve'

A trading strategy that is based upon the yield curve and used for interest rate futures. Investors hope to achieve capital gains by employing this strategy.

INVESTOPEDIA EXPLAINS 'Riding the Yield Curve'

Traders riding the yield curve buy long term bonds with the hopes of making a profit as the yields fall with the declining maturity of the bonds.

RELATED TERMS
  1. Maturity

    The period of time for which a financial instrument remains outstanding. ...
  2. Bond

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  3. Yield Curve

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  4. Interest Rate

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  5. Capital Gain

    1. An increase in the value of a capital asset (investment or ...
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