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What Happens to the Price of a Bond After I Buy It?

Bonds can be traded on exchanges before their maturity date, but the price might fluctuate based on the current interest rate environment.

As the buyer of, say, a $1,000 bond, you should be aware that as long as the company does not go bankrupt, you will receive $1,000 back at the date of maturity. During the life of the bond, however, the price at which you can sell that bond might oscillate depending on the interest rate environment and the perceived financial health of the company.

As a general rule, when the interest rates go up, the price of bonds in the “secondary market” (i.e., on exchanges) goes down, and vice-versa.

What Happens When a Company Goes Bankrupt?
Can You Sell a Bond for Less Than the Price You Paid For It?

Keywords: fixed income, secondary market, yield, bond prices,
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