CHARTTHREAD

Bond

A bond is a loan to a government or a company that pays interest, called the coupon, and returns the full amount on a set date. Bond prices move the opposite way to interest rates.

When interest rates rise, existing bonds that pay less become less attractive and their prices fall; when rates fall, their prices rise. Examples are US Treasuries, German Bunds, UK gilts and corporate bonds. Most bonds trade between dealers rather than on an exchange, so individuals often hold them through an ETF.

Learn more: which markets exist.