Bank Glossary - XYZ

Xetra (Exchange Electronic Trading)

New fully electronic market (electronic trading) for the German cash market with decentralized market access. In contrast to floor trading, Xetra trading is carried out in a central open order book. Electronic IBIS trading was discontinued with the introduction of Xetra trading in November 1997, as Xetra offers improved efficiencies at lower costs. Any German Stock exchange member (Bank, Broker) may become a Xetra member. Market participants enter their orders into the trading system from their respective trading rooms. Each participant can access publicized bids or enter buy and sell orders himself. Daily trading hours are from 8.30 a.m. to 5 p.m.

 

Yield curve

Reproduces the yield of bonds depending on the final maturity.

 

Zero bond

Bond issue which is not accompanied by an interest warrant (zero coupon bond issue). Instead of periodic interest payments, the difference between the repayment price and the issue price represents the income from interest up to the date of maturity. As a result, the investor only receives one payment: the selling price in the case of premature sale or the proceeds from redemption upon maturity. As a general rule, zero bonds are issued at a large discount (differential) and repaid on the date of redemption at a market price of 100 % (to par). Depending on the term, the creditworthiness of the debtor and the level of the capital market, the issue price may be more or less significantly below the repayment price.

Zero coupon bond

see Zero bond

ZKA

German abbreviation for Zentraler Kreditausschuß (Central Credit Committee)