What Is Convexity? She still remembers the phase when bonds felt “simple enough”—coupon, maturity, yield to maturity, maybe even duration. Then one day, someone casually mentioned bond convexity in a discussion about interest rates, and the room went quiet for her. The word sounded technical, almost like something only quants should worry about. But as […]

In finance, nothing works in isolation. Markets breathe together. Stocks, bonds, gold, oil—they all have their own rhythm, but often their moves are linked. That link is called correlation. Think of it like cricket and monsoons. One may not cause the other, but they often show up at the same time. Spotting such links helps […]

Buying an asset is not always the only expense involved in holding it. The owner may also pay interest, storage charges, insurance or other costs until the asset is sold. Together, these expenses are known as the Cost of Carry. The concept is especially useful for understanding why the futures price of an asset may […]

Imagine you’re thinking about lending some money, right? Buying a bond is kind of like that. The company or government you buy the bond from is borrowing from you. Now, for lending them your cash, they give you regular interest payments. The coupon rate is simply the fixed percentage of the original amount you lent […]

In the bond market, every investor wants one basic thing: timely repayment. Interest should come on time, and the principal should come back as promised. But sometimes, a borrower runs into serious financial trouble. When that trouble affects debt repayment, it may become a Credit Event. This term is important for anyone trying to understand […]

Introduction When you invest in bonds, especially those issued by corporations or lower-rated entities, understanding how long your money is at risk and how sensitive the bond is to interest rate changes becomes critical. One widely used concept in the bond world is Macaulay Duration. It helps investors get a sense of when they’ll recover […]

In everyday finance, the word Dealer pops up often, yet most investors are unsure what it really means. A Dealer stands ready to buy and sell securities on their own account, providing prices, inventory and liquidity. Without the Dealer, many trades would slow down or fail altogether. What is Dealer? So, what is Dealer in […]

Introduction Not every bond pays money along the way. Some bonds stay quiet for years and reward investors only at the end. Deep discount bonds work on this idea. They are bought at a much lower price than their face value and redeemed at maturity for a higher amount. For patient investors, they can be […]

Money runs on promises. When someone cannot keep up with those promises—like paying back a loan or honoring a contract—it’s called a Default. It sounds technical, but in reality, Default is simply about trust being broken in finance. And once trust is broken, the effects spread quickly. What Is a Default? People often ask: what […]