long bond

Long Bonds

A bond with a long time until maturity, often defined as more than two years. This is also called a long coupon.

long bond

A debt security with a relatively long period remaining until maturity. Also called long coupon. Compare short bond.
What are the advantages and disadvantages of buying long bonds rather than short bonds?

The advantages of buying long bonds rather than short bonds are:

  1. you get to keep attractive interest rates longer;
  2. yields generally are higher on long bonds versus the yields you can obtain on short bonds;
  3. price swings are more significant, and thus profits are more substantial when interest rates fall;
  4. price swings are more dramatic when you hold a longer bond and its credit rating is upgraded, permitting it to trade at a lower yield to maturity regardless of what interest rates in general are doing.

The disadvantages of buying long bonds as opposed to short bonds are:

  1. you are stuck with unattractive rates longer (unless you want to take your lumps and move on);
  2. if the yield curve begins to take on a negative shape, or even if it simply begins to rise, as a holder of long bonds you probably will have much larger capital losses than you would have if you had chosen to buy shorter maturities instead;
  3. price swings are more dramatic when you hold a deteriorating credit and the bond's maturity is longer.

Stephanie G. Bigwood, CFP, ChFC, CSA, Assistant Vice President, Lombard Securities, Incorporated, Baltimore, MD

Long bond.

Thirty-year bonds issued by the US Treasury are referred to as long bonds. The interest rate on the long bond is typically but not always higher than the rate on the Treasury's shorter term notes and bills.

The rate on the most recently issued bond is the basis for pricing other long-term bonds and setting other financial benchmarks.

References in periodicals archive ?
Of late US long bond yields decoupled from short yields - which rose in response to an improving US economy and higher rates to come in 2015 - recording a pattern similar to yields in Europe.
Treasuries drifted lower as the 30-year long bond again surrendered price gains following an unexpectedly costly $16 billion government auction of new 30-year debt.
Five- and seven-year notes are getting crushed versus the long bond.
Investors will do well to invest in long bond positions.
PRUDENT PICKS Our experts' safe funds Ticker 1-Year 5-Year Fund Name Symbol Return Return Rydex Govt Long Bond RYGBX 49.
Treasury bonds over 1994Q1 to 2005Q1; the predicted values were generated using the historical relationship that had existed between the long bond yield and several of its macroeconomic determinants including long-term inflation expectations, near-term outlook for the economy, and the stance of monetary policy.
Simply put, the long bond is a proxy for inflation expectations.
2]--the most common form of nitrogen molecule in air--connected by a long bond, the researchers report in the Jan.
Traders generally expect the cash bond market to remain bearish, with the yield on the long bond likely to hit 1.
That would be below its cost of capital, the cost of equity, so as a shareholder you'd want them to provide returns on that shareholders' capital in excess of what you could get on a long bond, which is effectively risk-free.
I'm probably one of the few people who has never seen a production of 'The Glass Menagerie,' but I read it years ago and it was always a play I wanted to come back to,'' said Robinson, whose directing credits include ``Waiting for Godot,'' ``Endgame,'' ``Dangerous Corner,'' ``The Homecoming'' and ``Yield of the Long Bond.
As in 1992-93, the long bond is nearing a 30-year low.