Explain Gilts/Bonds to me like I am 5 years old please?

OldScientist

RogerPensionGuy said:

Just a slight question as I'm about to buy some more gilts with low coupons trying to further navigate a pathway. 

Is there any advantage of using a "fill or kill order" in hoping the gilt price will just sink a bit enabling it to be purchased a bit cheaper? 

Or just keep getting 15 second quotes during the day and trying to buy in a dipp? 

Any information most welcome. 

***

I was looking around on my GIA today and came across "UK Treasury Strips" paying zero coupon and I had always read I needed/wanted low coupons due CGT advantages. 

So I googled UK Treasury Strips and found a link here on MSE, these are certainly what I don't want. 

Cheers Roger. 

Not to say you shouldn't buy the dip, but how large are intra-day price variations even with very long-term bonds (except perhaps around budgets)? The largest variations usually take place over weeks or months (e.g., as of today, the best time to buy TG73 and other long gilts would have been two months ago).

Treasury strips come in two forms: the 'principal' part which is effectively a zero coupon bond and the 'coupon' part. Both have their own uses (never bought one though).