Bond Futures

Bond Futures

An agreement to buy or sell a bond at a certain date at a certain price. That is, Investor A may make a contract with Investor B in which A agrees to buy a certain number of B's bonds at 90% of their par value on January 15. This contract must be honored whether the price of the bonds goes to 80% or 125% of par. As with all futures contracts, bond futures contracts can help reduce volatility in certain markets, but they contain the risks inherent to all speculative investing. These contracts may be sold on the secondary market, but the person holding the contract at its end must take delivery of the underlying asset.
References in periodicals archive ?
Closing prices of 10-year government bond futures and the yield on the latest issue of the 10-year bond on the Tokyo Stock Exchange on Friday.
Deutsche Bank and Invesco PowerShares Capital Management have launched six Exchange Traded Notes (ETNs) linked to the foreign sovereign bond futures. They will be the first ETNs to provide investors with leveraged or unleveraged exposure to the U.S.
The new format for Japanese gov't bond futures prices is as follows: