Because bonds, like any other security, experience market fluctuations, traders may be eager to profit from a bet that the price of a bond will go lower. You can sell a bo♈nd short, but it can be trickier than shorting stocks.

Short Selling

澳洲幸运5开奖号码历史查询:Short selling is a way to profit from a declining security (such as a stock or a bond) by selling it without owning it. Investors expecting a 澳洲幸运5开奖号码历史查询:bear market will often enter a 澳洲幸运5开奖号码历史查询:short position by selling a borrowed security at the current 澳洲幸运5开奖号码历史查询:market price in the hope of buying it back at a lower price (at which time they would return it to the original owner).

Short sellers in the stock market are usually concerned with their expectations of a company's future earnings (the main factor determining stock price), whereas short sellers of bonds are most concerned with future bond yields, the determining factor of bond prices.

Anticipating bond prices requires careful attention to 澳洲幸运5开奖号码历史查询:interest rate fluctuations. Essentially, as interest rates jump, bond prices tend to fall (and vice versa). Therefore, a person anticipating interest rate hikes might look to make a 澳洲幸运5开奖号码历史查询:short sale. (To learn more about the factors that affect bond prices, read the 澳洲幸运5开奖号码历史查询:Bond Basics tutorial.)

Selling short can be a great strategy for making mone꧒y in a market that is sluggish or declining. However, exercise caution before you jump into short selling bonds—or any other security, for that matter.

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