07 August 2015

Bond Trading: How to get started with Saxo Capital Markets UK

How to trade bonds with Saxo Capital Markets.

​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​1) Select a Bond

When buying or selling a Bond there are several parameters you might want to consider before deciding which Bond to buy and/or sell. In the box below is an example list of some of these parameters:

Bonds-parameters.jpg 

2) Contact Saxo Capital Markets UK

The trading execution process is initiated by contacting Saxo Capital Markets UK. 

Saxo Capital Markets UK offers full coverage during European opening hours (CET 08:00 - 17:30) during which European liquidity is present for the majority of Bonds.

How to contact Saxo Capital Markets UK 

  • Use Dealer Chat function on our trading platforms, asking for "Bonds", 
  • or Call your Account Executive, 
  • or E-mail: PrivateSalesUK@saxomarkets.com, stating your client ID and the details listed in the box below.

 Bond-order-details.jpg

3) Order Execution

Saxo Capital Markets UK quotes bid/offer price on request. Client can accept the price or choose to have Saxo Capital Markets work an OTC order for a price target. 

When the order is executed the position will be viewable in your Open Positions list. Prices shown are indicative, updated once a day and can deviate from actual firm trading prices. 

Please refer to Saxo Capital Markets's Best Execution Policy for more info.

4) Settlement of the trade

The executed order will be settled on the settlement date (typically 3 banking days after order execution).

The amount settled consists of 3 things: 

  • Price - the amount per 100 nominal value you buy or sell at. This is also known as "clean price".* 
  • Accrued interest - the interest that has accumulated on the Bond since last coupon date. If you buy a Bond you pay the accrued interest and if you sell a Bond you receive the accrued interest. See example of calculation in box below. 
  • Commission - Saxo Capital Markets will charge a commission for executing the trade. For further info please refer to our website​.​

*Another way to show the price is by taking the clean price and adding the accrued interest (calculated as the value per nominal 100). This is known as the "dirty price".

Example on Accrued Interest Calculation​

 

Bond-example.JPG
  • Bond coupon 5% p.a. - paid annually on February 15 
  • Settlement date of trade: August 15, 2014 
  • Last coupon date: February 15, 2014 
  • Days since last coupon (15. February - 15. August): 181 
  • Day count convention: Actual/Actual (days in period/days in year) 
  • Nominal value traded: EUR 100,000.00

 

Using Bonds as collateral

Bond-Collateral.JPG Saxo Capital Markets UK allows Bonds to be used as collateral for margin trading (with Forex, CFDs, Futures or Contract Options). The collateral value available for margin trading depends on the rating of the Bond, as outlined in the table. 

Please visit our website for more information: http://uk.saxomarkets.com/prices/bonds/


 

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Why trade with Saxo Capital Markets?

- Award-winning technology: choose between SaxoTrader and SaxoTraderGO 

- Active Trader price plans available, with equity commission fees from £5* and 

FX spreads from EURUSD 0.2** pips

- Ability to hold multiple currency sub accounts

- Multi-asset trading with over 30,000 assets to choose from across global markets

 

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* To qualify for the Active Trader Pricing Plan, you need to execute at least 100 trades per calendar month on Stocks, ETFs and Single Stock CFDs.

**The FX Active Trader price plans are designed for active traders who trade over 20mln notional per month.



 

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The value of your investments can go down as well as up.
Losses can exceed deposits on margin products.
Please ensure you understand the risks.

Disclaimer: This material should be considered as a marketing communication under the Financial Conduct Authority's rules. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, nor is it subject to any prohibition on dealing ahead of the dissemination of investment research. Saxo Capital Markets UK Limited ("SCML") undertakes reasonable efforts to ensure that any information published in this communication is reliable. SCML makes no representation or warranty, or assumes no liability, for the accuracy or completeness of any information contained in in this communication.

SCML provides an execution only service and this communication does not take into account any particular recipient's investment objectives, special investment goals, financial situation, and special needs and demands and nothing herein is intended as a recommendation for any recipient to invest or divest in a particular manner and SCML assumes no liability for any recipient sustaining a loss from trading in accordance with a perceived recommendation.

Saxo Capital Markets UK Limited is authorised and regulated by the Financial Conduct Authority, Firm Reference Number 551422. Registered address: 26th Floor, 40 Bank Street, Canary Wharf, London E14 5DA. Company number 7413871

The value of your investments can go down as well as up.
Losses can exceed deposits on margin products. Please ensure you understand the risks.