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Can You Sell a Bond for Less Than the Price You Paid For It?

Yes, if you sell the bond before its maturity, it’s possible that you would have to sell it at a discount.

If you bought a $1,000  bond with a 5% coupon, and a year later, the  company issued new $1,000 bonds with a 6% coupon, you would not be able to sell your bond to someone else for $1,000 (obviously, because they would rather purchase the new bonds for $1,000 which pay more annual interest than your old one).

Therefore, you would have to sell your bond at a discount. This is part of the interest rate risk inherent to bonds.

What Happens to the Price of a Bond After I Buy It?
Can You Pay More Than Nominal Value for a Bond?

Keywords: fixed income, trading, yield, interest rate risk, buying and selling activity, bond prices, inherent value,