What Is a Pregnant 100?
A pregnant 100 is a financial slang term for a bond, note, or instrument with a coupon rate close to 100%. It usually describes a deeply discounted security whose current yield or total return approaches 100% relative to its price or face value. Traders use the phrase to highlight extreme yield levels or unusual pricing dynamics.
How the Pregnant 100 Works
When a bond trades far below par, its current yield can rise sharply, creating what is called a pregnant 100. The term emphasizes that the instrument carries a very high income component compared with its market price. In practice, investors monitor such levels for potential value opportunities or elevated risk.
Why the Pregnant 100 Matters
Understanding a pregnant 100 helps investors interpret yield spikes, credit stress, or distressed market conditions. It is commonly used in fixed-income analysis, trading desks, and risk reports to flag securities with extreme returns. For more on bond yields and pricing, see Investopedia.
