Two posts in one day!
music selection: “Silver Lake” — Dark Moor (Spanaird Metal!)
Another sell limit order on a bond cleared today. On 21DEC2015 I purchased the 8.875 coupon December 2020 maturity bond from Rex Energy (REXX). I paid 2 dollars in commissions and 11.43 in accrued interest and 20.40 cents on the dollar for the rest. Today, I sold the bond for 42 cents on the dollar. I paid 2.75 in additional commissions and received 41.42 in accrued interest. During the holding period, I collected 88.76 in coupon payments.
The trade was in force for 245 days and yielded 193.02% on an annualized basis. Because you can take advantage of distressed sellers when entering the trade, the returns on discounted bonds are often better than those on equities or options. There is risk so be sure to assess a ballpark estimate for whether there is sufficient collateral to satisfy your capital at risk before buying.
Devour your prey raptors.