random question
if i buy a bond today and need money after like 2 to 3 months
can i exit or is it locked till maturity
same doubt
i assumed you can just sell like stocks but not sure
I think bonds are listed, so technically tradable? Not 100% sure how liquid they are though
You can sell, but it’s not as straightforward as equities.
Bonds are listed on exchanges, so in theory you can exit anytime. In practice, liquidity is the issue. There may not always be a buyer available at the price you expect.
Correct. Especially for smaller issues or less traded bonds.
yeah it’s not like stocks where there’s always someone on the other side
sometimes you just won’t get a good price
so basically assume you’re holding till maturity unless lucky?
That’s a good default assumption.
If liquidity is important to you, bonds may not behave the way equities do. Treat them more like a commitment unless you’ve checked trading volumes.
makes sense
i was thinking of using this like short term parking
probably not the right use then
Yes, for very short-term needs, better to use instruments designed for liquidity.
Bonds work best when you’re comfortable holding through the tenure.
got it
so not exactly locked, but not exactly liquid either