[rolltiide]

The bond interest payments are separate from the value of the bond. Which you can sell back at a greater premium and faster than even worrying about maturity.

This is the greatest bull market in bonds of all time and they are starting to behave like cheap deep in-the-money options contracts, which decline slightly in value over time due to theta (time value). Options are fun.

[pmart123]

I’m not sure how I get your logic? I do think the US bond yields have a large discrepancy versus other developed market yields, but convexity greater increases as yields fall towards zero. So how is that behavior similar to a deep ITM option?

[rolltiide]

the only similarity is that a deep ITM option is an asset that decreases in value in one way while gaining in value in another way, due to the same forces.

a negative yielding bond - or a bond going towards negative yield - decreases in value one way while gaining in a value another way, the more it gains in value the deeper the negative yield goes.