Zero-Coupon Bond Definition

A zero-coupon bond is a bond that does not pay periodic interest but is sold at a discount and repays full face value at maturity.

What is a Zero-Coupon Bond?

The investor's return comes entirely from the difference between the discounted purchase price and the face value received at maturity.

These bonds can be more sensitive to interest rate changes than bonds that pay regular coupons.

A zero-coupon bond bought for $800 that repays $1,000 at maturity delivers a $200 return over its term.

A zigzag pattern is a charting tool that filters out smaller price movements to highlight significant swings between highs and lows.