What is a bond

BTP training

What is a bond

A bond is a debt security issued by an entity (government, company or public body) to raise funds. Here is an overview of its main characteristics:

Characteristics of Bonds

Issuer:
- Bonds can be issued by different entities, including governments (sovereign bonds), companies (corporate bonds) and public bodies.
Yield:
- Bonds offer a return in the form of coupons, paid periodically (usually semi-annually or annually). At the end of the maturity period, the issuer repays the invested capital (nominal value).
Maturity:
- Bonds have a predetermined duration, which can vary from a few months to several decades. At the end of the maturity, the issuer must repay the principal.
Classification:
- Bonds can be classified based on credit risk (e.g. investment grade vs. high yield) or based on their structure (fixed, floating rate, inflation-linked, etc.).
Secondary Market:
- Bonds can also be bought and sold on the secondary market, where their price can vary based on market conditions, interest rates and the issuer's perception of risk.

Advantages of Bonds

Income Stream: They offer a regular income stream thanks to coupons.
Diversification: They can be used to diversify an investment portfolio.
Safety: Bonds issued by strong governments are considered safe investments.

Associated Risks

Interest Rate Risk: If interest rates rise, the value of existing bonds tends to fall.
Credit Risk: There is always a risk that the issuer will not be able to meet its payment obligations (default).
Inflation Risk: Inflation can erode the purchasing power of coupons and principal repayments.

Conclusion
Bonds are an important investment tool, particularly suitable for those seeking stability and a regular flow of income.

Information on BTPs

Choose a topic from the list below and learn more about it

Inflation and BTPs

Credit risk of BTPs

Choosing between BTPs and STOCKS

Buying BTPs

Capital gains

Reinvestment risk of BTPs

Selling BTPs before maturity

Capital gains

The profit from a BTP

Secondary Market

Stock Market Calendar and Trading Hours

Taxation on BTPs

Inflation risk of BTPs

Is it worth investing in BTPs?

The price of a BTP

Selling BTPs at maturity

The maturity of a BTP

Buying a BTP below par

The periodicity of BTPs

Dividends

Interest rate risk in BTPs

BTPs and risks

The coupons of BTPs

Liquidity risk of BTPs

MOT Market

BTPs, BOTs, CTZs and CCTs

Macroeconomic risks

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Calculate the net yields of fixed-rate BTPs with the online investment simulator

Find out how much investing in BTP can earn. The simulator will immediately calculate the net yield by processing the purchase price, maturity of the security, coupon interest, purchase day, investment amount, reduced taxation of 12.5%

Best BTPs on the market

Finding the best BTP to buy depends on your financial goals and what your expectations are. BTPs with higher coupons guarantee better returns but you have to pay attention to their duration, the maturity. The longer the maturity of the BTP, the more you are exposed to price volatility and inflation risk. Use the BTP investment simulator and find out how much you could earn by investing in BTPs.

How to calculate the earnings of a BTP

Find out how much you can earn by investing in BTPs with the simulator that will immediately calculate the net yield by processing the purchase price, maturity of the security, interest on the coupons, purchase day, amount of the investment, preferential taxation of 12.5%

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What is a bond

A bond is a security that gives the investor who buys it the right to receive, at the maturity date defined in the security, the reimbursement of the amount paid and a remuneration in the form of interest (called a coupon).

BTP training

What is a bond

Information on BTPs

Choose a topic from the list below and learn more about it

Calculate the net yields of fixed-rate BTPs with the online investment simulator

Best BTPs on the market

How to calculate the earnings of a BTP

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