Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Active Bond

What it is:

An active bond is a corporate bond that is traded actively on the New York Stock Exchange (NYSE).

How it works (Example):

Companies participating on the NYSE often choose to offer their bonds to investors in the same venue. These bonds, which trade at high volumes and with high frequency, are referred to as active bonds.

Why it Matters:

Active bonds are an attractive choice for investors because, as fixed-income securities, their price is largely unaffected by trade volume. In addition, such bonds tend to have higher Moody's and S&P ratings and may be employed as a safe investment or for diversification.