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

Short Selling

澳洲幸运5官方开奖结果体彩网: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官方开奖结果体彩网:bear market will often enter a 澳洲幸运5官方开奖结果体彩网:short position by selling a borrowed security at the current 澳洲幸运5官方开奖结果体彩网: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官方开奖结果体彩网: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官方开奖结果体彩网:short sale. (To learn more about the factors that affect bond prices, read the 澳洲幸运5官方开奖结果体彩网:Bond Basics tutorial.)

Selling short can be a great strateg🅠y for making money in a market that is sluggiꦉsh or declining. However, exercise caution before you jump into short selling bonds—or any other security, for that matter.

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