Bond Price Volatility

Steve Walsh from Western Asset Management discusses how he uses bond price volatility to profit and how he has added to his existing position on the Fannie Mae 30 year mortgage backed securities.

Upon issuance, bonds sells at face value, or par.

Bond price increases with maturity whenever the coupon rate exceeds the forward rate over the period of maturity extension.

Bond Price Fluctuations

Bond price fluctuations can be a result of two