Bonds are securities issued by state agencies and organizations, local governments and corporations. In other words, issuers are various government institutions. In this article we are going to be exploring characteristics of bonds and what a trader should know about them.

To begin with, there are different types of bonds. They are classified according to their issuing bodies, the length of time before maturity and a variety of other factors and conditions of issuance.

Following that, almost all bonds entitle the bondholder only to receive revenue in the form of fixed interest rate, but carry no right to participate in the management of the company, as it happens in the case of purchasing shares.

Another important point is when a bond reaches maturity; a seller will pay its full face value to the investor who purchased it. The most important information, including nominal value, maturity period and coupon rate is shown on the front of each bond, so it would be impossible to change it.

And last but not least, the purchase of bonds available to anyone with Internet access. Through trading terminals you can find stock information on each issue.

As an investment tool, bonds are considered to be more secure as compared to bank deposits and stocks, because you can control your expenses and revenues. Also interest rates are lower compared with banks and other creditors. It is not necessary to wait for bond maturity; you can sell the security in the secondary market. In this case, the price will depend on the bond yield at the moment of sale and on interest rates. If current market interest rates are greater than the rates of recent bond issues, the coupon rate will be also higher; therefore, the bonds could be sold at a better price. However, when interest rates fall in the country, the market price of old bond issues will be reduced considerably.