Glossary

A well-informed understand of the bond market’s various key terms and phrases is the first step in building a well-informed bond trading strategy. With that in mind, LuxXPrime’s team of experts has put together a glossary in which investors can find useful terms in order to all them to better navigate the world of LuxXPrime and make their LuxXPrime experience as seamless as possible.
Benchmark
An unmanaged group of securities used as a benchmark by which to measure another type of security’s performance is aptly known as a ‘benchmark’.
Coupon
The term ‘coupon’ originally referred to detachable piece of paper attached to physical bond certificates.
Lot size
In the world of finance, the standardized number of units of a financial instrument as set out by an exchange or similar regulatory body is referred to as the ‘lot’.
Rating
The credit quality of a bond is determined by independent agencies in the form of a rating.
Redemption
One of the many advantages of investing in fixed-income securities is that investors receive regular fixed rate interest payments.
Spread
The term ‘spread’ refers to the monetary value separating the ask price from the bid price, with the ask price usually being greater than the bid price.
Ask Price
Ask price - also known as offer price, offer, asking price or simply ask - is the price stated by the issuer or seller of a bond as their desired price of sale.
Bid Price
The highest price at which a potential buyer is willing to pay for a security is known as their bid price.
Firm Price
If the price of a security is at a fixed value and it is agreed that it will not change, this is what is known as a firm price.
Bond
A bond is a specific class of debt instrument. Large corporate entities or public authorities may choose to issue a bond in order to secure large amounts of finance in order to facilitate desired projects or developments.
Green bond
A green bond is fixed-income debt instrument where the proceeds of this bond are used to finance positive environmental impact projects. 
Social bond
Social bonds, like green bonds, possess similar elements of traditional bonds in terms of risk, structure and return.
Sovereign bond
A sovereign bond is a debt instrument issued by a government or sovereign body.
Sustainability bond
Sustainability bonds are the most recent addition to the collection of sustainable finance instruments and tie key elements of green and social bonds together to form a new sustainable finance bond. 
Broker
A professional individual or firm who arranges transactions between a buyer and a seller for a commission is known as a broker.
Dealer
Those who buy or sell securities on their own behalf are known as dealers.
Liquidity Provider
The term ‘liquidity provider’ is used to describe an individual or institution that has entered into a commitment to act as a market maker for a given asset class.
Trading Member
Only an authorised trading member of LuxSE is able to enter an order into the LuxSE trading system. 
Basis point
Basis points, also known as BPS, are the changes in financial percentages as represented by a common unit of measurement.
MIC Code
MIC stands for Market Identifier Code.
Yield to Maturity
Yield to Maturity (YTM) or redemption yield of a bond is the rate of return an investor will receive on their investment once a bond reaches its maturity date.
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