What is Bond Convexity?

You’ve heard of duration — but what if interest rates don’t move linearly? That’s where Convexity steps in! 🔍 📊 Convexity measures how a bond’s duration changes as interest rates shift — giving you a more accurate view of how prices respond to rate movements. 🔹 Positive Convexity = Price rises faster when rates drop, falls slower when rates rise 🔹 Negative Convexity = Opposite (common in callable bonds) 💡 Why it matters: Convexity helps investors fine-tune interest rate risk, especially when managing portfolios of long-duration or complex bonds. Want true control over your fixed income strategy? Time to look beyond duration.