Coupon
The contractual interest payment a bond makes to its holder, set when the bond is issued. A 4% coupon on a $1,000 bond pays $40/year regardless of what the bond trades for in the market afterwards. The price moves; the coupon does not.
A 30-year Treasury issued in 2020 with a 1.5% coupon still pays $15/year per $1,000, even after rates jumped to 5%.
Coupon
This term appears in a longer lesson, where the idea gets the proper treatment with examples and a working visualization.
Read the lesson →What you own
Stock
A share of ownership in a company. You profit if the company grows; you lose if it falters.
Read →Bond
A loan you make to a government or company. They pay you interest, then return your money.
Read →ETF
A basket of many investments, often hundreds, bought in a single transaction.
Read →Index
A representative basket of a market, like the S&P 500 or the IBEX 35.
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