Coupon Stripping
Coupon stripping separates a bond's interest payments and principal repayment into separately tradable zero-coupon securities.
Fixed-income terms for coupon stripping, stripped bonds, stripped coupons, STRIPS, and certificate-style instruments.
STRIPS, coupon stripping, and certificate terms describe securities or receipts created by separating or repackaging bond cash flows.
Use this branch when a bond’s coupon and principal cash flows are split, stripped, or converted into zero-coupon-like claims.
| Term | What it clarifies |
|---|---|
| Coupon Stripping | Separating coupon payments from principal claims. |
| Stripped Bond | A bond whose cash flows have been separated. |
| Stripped Coupon | A separated coupon cash-flow claim. |
| STRIPS Bonds | Securities tied to separate trading of registered interest and principal cash flows. |
| Variable Rate Certificate of Deposit | A variable-rate certificate term included near fixed-income certificate structures. |
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Coupon stripping separates a bond's interest payments and principal repayment into separately tradable zero-coupon securities.
A stripped bond separates principal and coupon cash flows into zero-coupon components that can trade independently.
This entry refers to STRIPS in the context of stripped coupon bonds.
STRIPS bonds are Treasury securities whose interest and principal payments are separated into individual zero-coupon instruments.
A variable-rate certificate of deposit pays interest that can reset with market rates or a stated benchmark, changing income over the CD term.