How can I learn more about Fixed Income?

I'm mainly familiar with equities, but really want to learn more about fixed income in general. Is there a book or guide that is good for this?


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Comments (18)

Best Response
Jun 10, 2017

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.

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Jun 14, 2017

would you recommend the fabozzi book a good start as well?

Jun 19, 2017

I would. Fixed Income Analysis, in particular. I've only gotten about a third of the way through it, but it's a great technical guide that doesn't use super advanced math.

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Jun 19, 2017

Hi, i would really appreciate if you could send me the IB fixed income 101 files, my email is simplyven at gmail dot com

Jun 10, 2017

1) fixed income is hard
2) start with the basics (US Treasuries)
3) after mastering US Treasuries (give us a call in 5-10 years), then go on to spread products, swaps, CDS, and options

    • 2
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Jun 14, 2017

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...)

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Jun 14, 2017

You can get the BMC certification. There's a fee but it's worth it (for starters). It's a high-level overview.

Jun 15, 2017

when you do get familiar with fixed income, i know a lot of traders love anti ilmanen's set of notes on the yield curve. the guy used to do quant stuff at salomon Smith Barney, believe he's at AQR now. it's somewhere on this forum or you can google for it.

Jun 15, 2017

too many formulas in fixed income

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Jun 15, 2017

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.

Jun 19, 2017

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.

Jun 19, 2017

What about an industry overview, or a 101/102 post.. has there been an in depth one on WSO?

Jun 20, 2017

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.

Jun 20, 2017

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.

Jun 20, 2017

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

Jun 20, 2017