STRIPS (Separate Trading of Registered Interest and Principal of Securities)

Definition of "STRIPS (Separate Trading of Registered Interest and Principal of Securities)"
  1. A Federal Reserve system permitting independent trading and ownership of principal and coupon portions of certain Treasury securities, enabling the creation of zero coupon Treasury securities from specific whole bonds
How to use "STRIPS (Separate Trading of Registered Interest and Principal of Securities)" in a sentence
  1. Given the low risk profile and easy convertibility, the STRIPS system draws heavy institutional investment.
  2. The bank used STRIPS to separately sell the interest and principal elements of Treasury securities.
  3. The STRIPS mechanism allowed them to align their risk profile with zero coupon Treasury securities.
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