Buying a BTP below par

BTP training

Buying a BTP below par

Buying a BTP (Buono del Tesoro Poliennale) below par means buying the security at a price lower than its nominal value (100). Here's what to consider in this situation:

Meaning of Buying Below Parity
- Price Below 100: If a BTP is trading at a price below 100, it means that you can buy it at a discount to its nominal value. For example, a BTP with a price of 96 is bought at a cost lower than its nominal value.

Higher Yield
- Increased Yield: Buying below par increases the effective yield of the security. In fact, in addition to the coupons, when the BTP expires, you will receive the nominal value (100). This can lead to an additional gain compared to the coupons themselves.

Market Risk
- Market Conditions: A BTP may trade below par due to higher interest rates on the market or higher risk perceptions related to the issuer. It is important to evaluate the reasons why the price has fallen.

Taxation
- Withholding Tax on Coupons: The coupons received will be subject to a 12.5% tax. Furthermore, if you sell the BTP before maturity at a higher price than the purchase price, you will have to consider the taxation on capital gains.

Investment Strategy
- Evaluation of Opportunities: Buying BTPs below par can be an interesting option for investors seeking returns. However, it is essential to analyze the economic context and your liquidity needs.

Conclusion
Buying BTPs below par can offer opportunities for returns, but also involves risks related to market conditions. It is important to make a careful assessment before making a decision.

Information on BTPs

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

Stock Market Calendar and Trading Hours

Credit risk of BTPs

Dividends

Macroeconomic risks

Is it worth investing in BTPs?

The price of a BTP

Liquidity risk of BTPs

The maturity of a BTP

Capital gains

The periodicity of BTPs

Choosing between BTPs and STOCKS

BTPs, BOTs, CTZs and CCTs

MOT Market

Selling BTPs at maturity

The profit from a BTP

Inflation risk of BTPs

Interest rate risk in BTPs

Inflation and BTPs

The coupons of BTPs

Reinvestment risk of BTPs

Capital losses

Buying a BTP below par

What is a bond

BTPs and risks

Selling BTPs before maturity

Secondary Market

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How to calculate BTPs

Enter how much to invest in BTPs in the simulator and the net yield will be immediately calculated by processing the purchase price, maturity of the security, interest on the coupons, purchase day, amount of the investment, preferential 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.

Specific features of BTPfacile.it

Investment Simulator: This tool allows you to calculate the net yield of BTPs in real time. By entering the amount you wish to invest, the simulator processes various parameters such as the purchase price, the maturity of the security, the interest of the coupons and the reduced tax rate of 12.5%
Information on the Best BTPs: BTPfacile.it provides an updated list of the best BTPs to buy, based on various factors such as maturity, market price and coupons.
Price Trends: You can view the average price trend of BTPs daily, helping you make informed investment decisions.
BTP Education: The site offers educational resources on BTPs, explaining concepts such as the frequency of coupon payments and the differences between various types of government bonds.
Secondary Market: BTPfacile.it provides information on the secondary market, where investors can buy and sell securities among themselves without the intervention of the issuer.

What they say about us

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Francesco

BTPfacile.it offers useful and clear information on BTPs and has an intuitive interface, to be recommended

Giuseppe

The BTP yield simulator is useful, it also provides updated information on the best BTPs to buy based on various parameters such as maturity, market price and coupons.

Giovanna

I use BTPfacile.it with great satisfaction and consider it far superior to other sites in the industry, even those that have been around for many years. Unlike other portals, BTPfacile.it is simple, clear, and focused on what really matters: net returns. In just a few clicks, I can compare stocks, simulate real investments, and understand exactly what's best for today. I don't need to download Excel spreadsheets or interpret complex data: everything is immediate. I also use it regularly to help friends and family, and everyone is happy with it. Congratulations to the team: you've created a truly useful and intelligent tool. Keep up the good work!

Disclaimer
All information displayed on BTPfacile.it is to be considered for informational purposes only and does not constitute in any way an investment, savings, legal or tax advice. The data displayed is generated by our systems automatically and despite our continuous commitment to offering the best possible service and the best online BTP investment simulator, we do not guarantee the accuracy of the information and we do not assume any responsibility regarding the use of the information itself
The BTPfacile.it team

Buying a BTP below par