Best Response

Big Short, Liar’s Poker, and Flash Boys (All by Michael Lewis) are great reads. It will be very beneficial to understand inflation, interest rates, credit ratings and their relationship to the bond market(or issuing debt in general). I have some IB fixed income 101 packets I can send you as well. Shoot me a message when you get the chance if interested.

"Jack of all trades, master of none"
 

Fabozzi & Tuckman (these are similar) The Treasury Bond Basis (teaches cash vs futures) Fixed Income Markets and Their Derivatives (college textbook)

It will take you a long time to understand everything in these books, especially if you don't have a knowledgeable person to explain things. look for youtube vidoes to help with topics that you find dificult. there are lots of good ones out there (swaps, futures, options, etc...)

 

I work in DCM in a hybrid trader/underwriting role and fixed income is hard as hell to learn in the beginning. Best book in this business for beginners is definitely Bodie Kane. Read up, understand bond dynamics, interest rate risk, duration, convexity, CPR, etc. and you should be fine. It'll take a while to get used too, as fixed income is more difficult than other product groups.

 

CFA study material (Schweiser or Institute material, latter is more detailed). Just look for the fixed income book online. Did a quick Google search and found a bunch under $10.

 

Work in FI and rates From a content perspective this book was quite helpful when i first started; Interest Rate Swaps and Their Derivatives: A Practitioner's Guide by Amir Sadr Great deal of useful practical information, also has a rundown of basic bond maths, what a yield curve is and risk metrics at the beginning (DV01, BPV) I would also recommend you start by understanding how the interbank funding market works before moving up the curve.

 

I've been out of the FI game for a while now, but in short: 1.) No. Benchmarking and media talking bobble heads 2.) Depends what you mean by "active management". We were constantly assessing price/yield moves, duration, credit risk, running sensitivities, etc. in addition to pumping brokers to try to find out who was doing what. I'm sure some guys set it and forget it, but I wouldn't advise it. 3.) Bloomberg terminal. If not, Interactive Brokers. For theory, Fabozzi cannot be beat.

 

You could google a lot of this, so I'll only give a brief run down of what little I know.

1) Muni = municipal (i.e. city of nyc water) Treasury = US gov't (federal), lowest interest paying bonds (typically) due to their perceived safety/liquidity HY = bonds typically rated by CRAs (moodys, fitch, s&p) with lower than BBB (have higher spreads) Investment grade = high quality companies as determined by CRAs (not always trustworthy) and have tight spread to treasuries

2) Issue bonds according to seniority according to lender standards (may be off on this), and is in accordance/can be found (the terms) in the bond's covenant. Seniority means they get priority to assets in case of bankruptcy/restructuring/liquidation. And yes, make money on the spread.

3) You should know about ABS (with their cause of 08 and all), but are essentially a group of (e.g.) mortgages packaged together to pay out coupons from the diversified pool. ABS are backed by a specific pool (i.e. they are independent of the issuer's credit quality). Saying basically, if ford goes belly up, the ABS backed by some auto loans won't become worthless since it is already designated a pool of assets.

Read Fabozzi Fixed income book, should help out a little.

Hope that covers some of the basics

"History doesn't repeat itself, but it does rhyme."
 

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