Gilt-Edged Market

period should indicate higher levels of trading. In any case the introduction of strips has

added a flexible new investment product that should benefit sterling markets generally.

5.2 Zero-coupon bond trading and strategy

As we have noted elsewhere trading in strips began only gradually, and volume and liquidity

levels are expected to increase as the market becomes more mature. At the start of trading,

transparency in the market was not as high as that in the coupon gilt market, a factor that

some GEMMs were able to exploit to their advantage. That said, strips are familiar to

participants in other markets such as the USA and France, and the principles ...