Strip Bond

	Definition of 'Strip Bond' A bond where both the principal and regular coupon payments--which have been removed--are sold separately. Also known as a "zero-coupon bond."
	Investopedia explains 'Strip Bond' An investment firm will usually buy a debt instrument and "strip" it into its separate parts. Strip bonds usually trade at a discount and mature to par value.

Related Definitions

Bond

A debt investment in which an investor loans money to an entity (corporate or governmental) that borrows the funds for a defined period of time at a fixed interest rate. Bonds are used ...
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Coupon

The interest rate stated on a bond when it's issued. The coupon is typically paid semiannually. This is also referred to as the "coupon rate" or "coupon percent rate".
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Debt

An amount of money borrowed by one party from another. Many corporations/individuals use debt as a method for making large purchases that they could not afford under normal ...
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- Par Value
  
  1. The face value of a bond. 2. A dollar amount that is assigned to a security when representing the value contributed for each share in cash or goods.
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- Principal
  
  1. The amount borrowed or the amount still owed on a loan, separate from interest. 2. The original amount invested, separate from earnings.3. The face value of a bond.4. The owner of a ...
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- Zero-Coupon Bond
  
  A debt security that doesn't pay interest (a coupon) but is traded at a deep discount, rendering profit at maturity when the bond is redeemed for its full face value. Also known as an ...
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- Semi-Annual Bond Basis - SABB
  
  A conversion metric to compare rates on bonds with varying characteristics. Since bonds come with all types of coupon rates and payment frequencies, it's important to be able to find ...
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Bond Basics Tutorial

Investing in bonds - What are they, and do they belong in your portfolio?
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Advanced Bond Concepts

Learn the complex concepts and calculations for trading bonds including bond pricing, yield, term structure of interest rates and duration.
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Corporate Bonds: An Introduction To Credit Risk

Corporate bonds offer higher yields, but it's important to evaluate the extra risk involved before you buy.
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- The Advantages Of Bonds
  
  They may not be sexy, but bonds do have a place in every balanced portfolio. Find out why.
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