Bull Floater

The term bull floater is used synonymously with the term reverse floater to describe a specialized type of bond. The interest rate of a reverse floater mirrors a reference rate (such as the LIBOR), but inverts the reference rate which it tracks.

When the rate tracked by a bull floater bond goes up, the interest paid to investors in the form of coupon payments goes down. When the tracked rate goes down, the interest rate used for coupon payments goes up.

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Editor Daniel Dreier
Daniel Dreier is editor and personal finance expert at moneyland.ch.