Money market instruments
Money market instruments are short-term securities that don't have periodic coupon payments. Instead, they have one repayment at maturity. In FA Platform, you can set up money market instruments with discount or add-on yield type:
Discount instruments are sold below the face value and redeemed at full face value at maturity. The return to the investor is the difference between purchase price and face value.
Add-on rate instruments are sold at a face value or below and redeemed at the price that includes the original principal and the interest earned over the term.
Create a money market security
Choose New → New security in the top menu. The Security window opens.
Fill in the necessary fields. The following fields are relevant for money market instruments:
Basic info tab:
Security type: "Bond".
Multiplier, Multiplier 2: "100".
Extra info tab:
Set the Issue price, Issue date, Maturity date . Enter the face value in the Maturity price field.
Choose the yield type in the Yield type field:
Discount rate (T-bills) – for the discount instruments.
Add-on rate (Deposits) – for the add-on rate instruments.
Choose the convention to calculate the price and yield in the Payment daycount convention field.
Market data info tab. You can enter prices in Close fields (this is optional – you can have the price calculated automatically in transactions based on the discount or add-on rate: Buy and sell money market instruments):
The bond's current price.
The discount or add-on rate (for example, 3.45%) – the system calculates the price based on it.
For the full list of fields in the Security window, see Security window in FA Back reference.
Buy and sell money market instruments
To buy or sell money market instruments, create a buy or sell transaction and fill in the transaction details:
Define the trade dates in the Transaction date and Settlement date fields.
Fill in the amounts:
Denomination
Unit price. You can:
Enter a question mark "?" and press enter to fetch the bond price from the Market data info tab.
Enter the add-on or discount percentage (for example "3.45%") and press enter to have the price calculated automatically.
Run expirations
To generate expirations, use the Redemption corporate action (see Redemption). You can schedule corporate action runs to repeat them regularly. Use one of the tools that suits you best:
To run expiration on one security, follow the steps in Record and run corporate actions to client portfolios.
To run expirations on multiple securities, import corporate actions in a file (see File format for importing corporate actions) and run them from the Corporate actions view in FA Back (see Record and run corporate actions to client portfolios).
To run expirations on all bonds in the system, use the functionality described in Automate corporate actions.
Monitor key indicators
You can monitor key bond indicators, such as yield, convexity, and duration, in Analytics+. For details, see Analytics+ in FA Back reference and Monitor portfolios with debt instruments in Analytics+.