The goal of buying bonds on margin is typically to profit from the spread between the bond’s yield and the margin interest rate.
If a bond yields 6% and your brokerage charges 4% for margin, you theoretically pocket a 2% "positive carry" on the borrowed funds. buying bonds on margin
Margin rates at retail brokerages are often higher than high-quality bond yields, creating a "negative carry" where the cost of borrowing exceeds the income generated. Strategic Review: Pros vs. Cons Buying on Margin: How It's Done, Risks and Rewards The goal of buying bonds on margin is
