The put date: miss it and you are left holding a different bond
· 2 min · beginner
Automated material · TradeAlmanac editorial deskDraft prepared by a language model from our stored data; not reviewed by an editor.
A put date is an option, written into the terms of the issue, to present the bond early for redemption at a price known in advance.
Why the issuer offers it
It lets them issue a long bond without fixing the coupon for the whole term. On the put date the issuer announces a new coupon for the next period; those who disagree present the bond for redemption.
Why it is dangerous for a holder
The new coupon may be set at a token level — formally not a default but a term of the issue. An investor who missed the presentation window is left in the bond on unattractive terms for years.
Two kinds
A put option is the holder's right to present the bond. That is the case described above.
A call option is the issuer's right to redeem the bond early. Here the decision is theirs, and they use it when it suits them: usually when rates fall, so they can refinance cheaper.
How it changes the yield calculation
For a bond with a put date, yield is computed to that date rather than to maturity: that is when certainty arrives. Yield to maturity on such a bond is a number resting on an unknown future coupon.
What to check before buying
Whether there is a put date, when it falls, whose option it is, and how the displayed yield was computed. Those four points change the meaning of every other figure on the issue.
Related: Yield to maturity: the only honest number a bond has and How to choose a bond, step by step.
Draft prepared by a language model from our stored data; not reviewed by an editor.
Model: claude-opus-5
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