Negative duration

Negative duration
A situation in which the price of the MBS moves in the same direction as interest rates. ...

negative duration
(1) The name for a particular relationship between changes in the price of a debt security and changes in prevailing interest rates.

Negative duration
Occurs when the price of an MBS moves in the same direction as interest rates.

However, instruments such as IO mortgage backed securities have negative durations. You can also achieve a negative duration by shorting fixed income instruments or paying fixed for floating on an interest rate swap.

Negative duration
Negative dynamic resistance
Negative edge
negative electricity
Negative Electron Affinity
Negative elimination
Negative Emitter Coupled Logic
negative end-expiratory pressure
Negative energy
Negative entropy ...

Duration: Duration measures the change in the value of a bond's servicing for the next incremental change in interest rates. A negative duration means that values fall when rates fall (just the opposite of a bond).

A bond covenant that limits or prohibits certain actions unless the bondholders agree.
Negative duration
Occurs when the price of an MBS moves in the same direction as interest rates.
Negative income tax ...

Duration
Measures price sensitivity to interest rate changes. The longer its duration, the more sensitive an instrument is to interest rates. Instruments whose price rises as rates rise are said to exhibit negative duration.

See also: Prepayment, Expense, Banks, Funding, Convertible security