Bonds, when issued, are usually priced "at par" (usually $1,000 per bond) which implies that the buyer is getting a fair deal for lending money to the issuer, relative to other investments of similar risk.
Marty may buy bonds at par value ($1,000) from Doc Brown Scientifics, Inc. (Ticker: FLUX) on Monday, agreeing to loan DOC $1,000 in exchange for $100 interest (a 10% interest rate) for one week, but flash forward to Wednesday, and things have changed. Now, FLUX’s suppliers in Libya are unable to provide it with enough plutonium to fuel operations and FLUX may not be able to pay its debt obligations.
This new level of risk makes Marty wish he had only paid $750 for that bond, instead (while still receiving $100 of interest). If only he could go back in time...If given a chance, Marty would rather not have paid the $1,000 par value, but instead bought that bond for $750. That is, at a discount to par.
If things went the other way, FLUX may have similarly preferred to sell that bond at a premium, receiving more than $1,000 (while still paying just $100 in interest).
Related or Semi-related Video
Finance: What Does "Buy Minus" Mean?3 Views
Finance a la shmoop what does buy minus mean? buy minus is a trading limit or rather a
trading rule given by a client wanting to acquire stock when it goes on flash
sale think Macy's white-flower day sale meets a bolt of lightning you know so [Sale banner outside Macy's and lightning flashes]
how's that work well Bobby bargain hunter sees the
highly volatile whatever dot-com trading at 8250 a share but notes that in the
last week it has been as high as 88 and as low as 75 Bobby wants to be long the
stock ie own it but doesn't want to pay retail price for it ie a "market
order" would just buy that stock at whatever price its trading at this [Market price appears]
moment so he puts in a buy minus order with a limit of 72
if the stock suddenly gaps down to that level he'll be the proud new owner of a [Bobby with a pile of stock]
hundred shares have whatever.com and if it doesn't well then Bobby bargain
hunter will have to shop elsewhere for bargains yeah this guy's such a big
bargain hunter he even hackles at restaurants can you believe that [Waiter approaches Bobby with the check]
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