Sure, I bought a Delta Airlines bond with a 3.4% coupon for 93 cents on the dollar due in a year from now. Provided Delta doesn't go bankrupt in a year I will make 10%.
They have a pretty healthy balance sheet compared to their peers and I don't expect the government to let the sector fail in such a way that bondholders get wiped out.
Fidelity allows one to do so as well. The interface is a bit different from trading stocks (no intraday charts, additional fundamentals like YTM/YTW) but not exactly obscure. You search for a bond, type in a bid, quantity, and hit buy. The coupons show up in your account every few months.
What happens in the event of a default? I would have thought that your broker would zero it out, but I remember hearing about someone buying a worthless bond from a friend for like $1 once as a favor.
Really? Care to share your experience/details?
Sure, I bought a Delta Airlines bond with a 3.4% coupon for 93 cents on the dollar due in a year from now. Provided Delta doesn't go bankrupt in a year I will make 10%.
They have a pretty healthy balance sheet compared to their peers and I don't expect the government to let the sector fail in such a way that bondholders get wiped out.
I would of thought holding Delta stock would have more than 10% upside if they don’t go bankrupt
5 replies →
Fidelity allows one to do so as well. The interface is a bit different from trading stocks (no intraday charts, additional fundamentals like YTM/YTW) but not exactly obscure. You search for a bond, type in a bid, quantity, and hit buy. The coupons show up in your account every few months.
What happens in the event of a default? I would have thought that your broker would zero it out, but I remember hearing about someone buying a worthless bond from a friend for like $1 once as a favor.