Quality Segment for Bonds
Trading Bonds at the Frankfurt Stock Exchange
Few investors know that bonds can be bought and sold within their
maturity directly on the stock market. That guarantees a continuous
price determination, in contrast to dealing with a bank. Market
makers calculate the price of liquid bonds not just once per day,
but with each buy and sell order. The market, not the bank, sets
The yield depends on the overall interest situation and on the credit-worthiness of the issuer. The poorer the rating, the higher the interest paid. Higher interest, though, means a higher risk that the issuer will default and not be able to pay any interest at all.
The Frankfurt Stock Exchange offers a broad selection of bonds with about 14,000 domestic and foreign government and corporate bonds.
Credit institutions, the government or corporations issue debt in the form of bonds. By buying a bond, the investor lends money to the issuer, who agrees to repay it, plus interest, at a predetermined time. The investor can calculate the yield ahead of time and has the ability to plan for his investment. Bonds have various characteristics, such as time to maturity, interest payment and type of yield.