September 23, 2009

Option trading strategy - The chief reason they continually sell at wide discount from par is that they carry coupon rates which are still relatively low by today's standards.

As a result, they should offer further capital appreciation possibilities. "Meanwhile," said Financial World, "the investor has a source of steady income; the rating of A or better accorded them by Standard `k Poor's indicates that both interest and principal are safe for all practical purposes. The chief risk in holding them is merely that associated with short-term fluctuations in the bond market”a risk that doesn't seem particularly large under present conditions. Why Buy Railroad Bonds? Railroad bonds are another group of bonds mostly available at discount levels. In its January 11, 1961, issue, Financial World saw profit potential in ten medium-grade railroad bonds, six of which were involved in mergers.

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