trading corporate bonds
The main differences, especially to government bonds, lie in the different legal structures of the bonds, which is why this section will mainly deal with them. The distinction between corporate bonds, convertible bonds, bonds with warrants and profit participation bonds as well as profit participation rights is relevant.
Corporate bonds
Industrial bonds are bonds issued by mostly larger companies - contrary to what the name suggests, not necessarily from the industrial sector. Most corporate bonds are issued as bearer bonds: The holder of the certificate is in possession of the claim against the issuer and does not have to prove it separately. The right from the paper follows the right to the paper. With other claims under private law, there is the risk that the seller (not the issuer) deceives the buyer of the claim about its existence or nature/scope.
This risk does not apply to bearer bonds. If the issuer makes repayment of the nominal amount and/or interest payments in favour of an unauthorised party, the actual holder of the claims must assert them against the unauthorised party. The issuer, on the other hand, is released from its debt. Bearer bonds can be traded on the stock exchange in an uncomplicated manner if the issuer so wishes and registers the securities for trading. You can also trade CFD on shares. Feel free to check https://exness-vietnam.asia/trader-app/ and try it on your own.
For this purpose, admission to trading on stock exchanges must be applied for. Committees of the competent stock exchange then decide whether the requirements for a listing are met. The application is made by the syndicate-leading bank.
Usually, the nominal value is issued in denominations of 100 to 10,000 euros, so that the securities traded are always partial bonds. Issuers are obliged to prepare and publish an issuing prospectus, which must contain various details about the company and its business condition and is intended to protect investors.
Industrial bonds can generally be issued as coupon bonds or zero bonds. Annuity bonds are not widespread, but in principle they are just as possible. Another rare case is perpetual bonds, which have an interest coupon but no fixed date for repayment.
US government bonds
US government bonds with a maturity of up to one year are called T-bills. The term T-notes covers bonds with a term of two to ten years and the term T-bonds covers bonds with a term of more than ten years. The "T" stands for "Treasury" - the US Treasury. T-notes and T-bonds are usually issued in February, May, August and November and carry an annual or semi-annual coupon. The minimum order size is usually USD 1,000 or a multiple thereof. US bonds are trivially denominated in USD, so investors from Europe bear the exchange rate risk.
Bonds from the World Bank and Co.
Bonds issued by international institutions such as the World Bank or the European Development Bank are not directly included in the government bond segment. However, the bonds of these issuers can in principle also be acquired and traded by any investor. Below is a screenshot from the Frankfurt Stock Exchange database of a World Bank bond.