Short Coupon
Definition of 'Short Coupon'A payment made on a bond within a shorter time interval than is normal for the bond. Most often, a short coupon is a bond's first coupon. A short coupon is used if the issuer wishes to make payments on certain dates, for example, June 30 and December 31, rather than simply after a particular interval from when it is sold in the primary market. |
|
Investopedia explains 'Short Coupon'In the U.S., coupon payments are commonly made every six months. In other countries, it is customary to make coupon payments only once per year. The schedule by which coupon payments are made does not generally affect yields, since the price of a bond will quickly adjust such that the effective yield on any given issue is comparable to similar bonds in the market. However, unusual payment schedules, such as those in which no payment is made for several years, may require a higher effective yield to entice buyers. |
Related Definitions
Articles Of Interest
-
Basics Of Federal Bond Issues
Treasuries are considered the safest investments, but they should still be analyzed when issued. -
The Advantages Of Bonds
Bonds contribute an element of stability to almost any portfolio and offer a safe and conservative investment. -
Junk Bonds: Everything You Need To Know
Don't be fooled by the name - junk bonds may be for you if you know how to analyze them. -
Convertible Bonds: Pros And Cons For Companies And Investors
Find out why businesses choose this type of financing and what effect this has on investors. -
The Bear On Bonds
Bond investing is a stable and low-risk way to diversify a portfolio. However, knowing which types of bonds are right for you is not always easy. -
Analyzing The Best Retirement Plans And Investment Options
Understanding the various retirement investments - from annuities to 401(k)s and everything in between - is crucial to reaching your retirement goals. Here, we examined many of the popular investments ... -
Zero-Coupon Bond
A zero-coupon bond or ‘no coupon’ bond is one that does not disburse regular interest payments. Instead, the investor buys the bond at a steep discount price; that is, at a price ... -
Why Your Pension Plan Has Sovereign Debt In It
One type of security pensions tend to invest in is sovereign debt, or debt issued by a government. -
Climb The Bond Ladder To Higher Income
Whether it's learning how to ladder bonds or finding alternatives, investors seeking better returns need to be more active. -
6 Popular ETF Types For Your Portfolio
Exchange traded funds are an extremely popular diversification tool that can protect your portfolio during troubled periods.
Free Annual Reports