A callable bond with a high coupon that is nearing the end of its call protection period. That is, the pickup bond is about to end the grace period during which it cannot be called. If prevailing interest rates fall during the remaining grace period, the pickup bond will be redeemed at a premium to its par, resulting in a profit for the bondholder, even though it will deprive her of future coupon payments.
A bond with a relatively high coupon and a short period remaining until it is likely to be called by the issuer. If interest rates fall and the bond is called, the investor will pick up a premium equal to the difference between the call price and the purchase price.