Contact Us

If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.

Please fill out the contact form below and we will reply as soon as possible.

  • Courses
  • Find a Job
  • Home
  • Economics, Finance, & Analytics
  • Investments, Trading, and Financial Markets

Pure Yield Pickup Swap - Explained

What is a Pure Yield Pickup Swap?

Written by Jason Gordon

Updated at April 17th, 2022

Contact Us

If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.

Please fill out the contact form below and we will reply as soon as possible.

  • Marketing, Advertising, Sales & PR
    Principles of Marketing Sales Advertising Public Relations SEO, Social Media, Direct Marketing
  • Accounting, Taxation, and Reporting
    Managerial & Financial Accounting & Reporting Business Taxation
  • Professionalism & Career Development
  • Law, Transactions, & Risk Management
    Government, Legal System, Administrative Law, & Constitutional Law Legal Disputes - Civil & Criminal Law Agency Law HR, Employment, Labor, & Discrimination Business Entities, Corporate Governance & Ownership Business Transactions, Antitrust, & Securities Law Real Estate, Personal, & Intellectual Property Commercial Law: Contract, Payments, Security Interests, & Bankruptcy Consumer Protection Insurance & Risk Management Immigration Law Environmental Protection Law Inheritance, Estates, and Trusts
  • Business Management & Operations
    Operations, Project, & Supply Chain Management Strategy, Entrepreneurship, & Innovation Business Ethics & Social Responsibility Global Business, International Law & Relations Business Communications & Negotiation Management, Leadership, & Organizational Behavior
  • Economics, Finance, & Analytics
    Economic Analysis & Monetary Policy Research, Quantitative Analysis, & Decision Science Investments, Trading, and Financial Markets Banking, Lending, and Credit Industry Business Finance, Personal Finance, and Valuation Principles
  • Courses
+ More

Table of Contents

What is a Pure Yield Pickup Swap?How Does a Pure Yield Pickup Swap Work?

What is a Pure Yield Pickup Swap?

A pure yield pickup swap is bond purchase and sale transaction, where the investor swaps her short-term, low-yield bond is exchanged for a longer-term, higher-yield bond.

Back to:INVESTMENTS & TRADING

How Does a Pure Yield Pickup Swap Work?

This transaction is used by investors who are looking for more yield and are willing to take on more risk. Basically, it is a way for an investor to exchange her lower-risk assets (short-term bonds) for higher-risk assets (long-term bonds), as the higher-risk assets have a higher return. The downside is that the longer-term bonds are generally a lower quality rating. Long-term bonds have greater risk because there is more time for interest rates to change. If interest rates rise, then the value of previously-issued bonds goes down (as they are at the older, lower interest rate).

pure yield pickup swap

Was this article helpful?

Yes
No

Related Articles

  • Qualified Foreign Institutional Investor - Explained
  • Adjustment Bond - Explained
  • Market Exposure - Explained
  • Worden Stochastics - Explained



©2011-2023. The Business Professor, LLC.
  • Privacy

  • Questions

Definition by Author

0
0
Expand