March 13, 2023

What Broker Affiliates Need to Know About Bonds

Promote Treasury Bonds as a Broker Affiliate

If you want to take your profits to a new level and earn the highest possible commissions in 2023, you’ll need to explore alternative affiliate marketing strategies. Most broker affiliates focus on a narrow class of high-profile assets like forex, cryptos, and stocks. They miss lucrative opportunities to drive high-value traffic by not promoting lesser-known assets like bonds.

This blog post will cover all the basics of bonds (also known as Treasury bonds) and the $119 trillion international bond markets. We’ll give you some useful tips on promoting these exciting assets in your affiliate marketing campaigns. Read on for the broker affiliates’ guide on bonds.

What Are Bonds?

Bonds are one of those financial instruments that a lot of people have heard of but don’t actually know much about. Fortunately, bond trading is pretty simple – far less complex than forex. And it is easy to promote.

A bond is a convenient way for governments, corporations, or other large organizations to raise money. When you buy a bond, you’re effectively making a loan to the issuer. Each bond comes with two guarantees for the buyer:

  1. The seller will pay an agreed rate of interest to the bondholder. The interest is usually paid at six-month intervals until the expiry date of the bond.
  2. When the bond expires, the issuer will repay the face value of the bond. For example, if you buy a twenty-year government bond for $50,000, you might receive a total of 40 interest payments, before eventually receiving your $50,000 investment back.

Once issued (and still valid), bonds can be resold on the open market. They are regarded as one of the most stable and low-risk types of investment. Even though a typical government bond may not yield a high return compared to forex or value stocks, they are extremely dependable. However, bond traders need to anticipate changes to the currency value that a bond is issued, as well as inflation. As a rule, long-term bonds pay higher rates of interest.

The Advantages of Bonds as Assets

One major advantage of bonds is that national governments depend on the availability of easy loans and don’t readily default on their debts. The last time the US government defaulted on treasury bonds was in 1979. The financial consequences (and loss of international prestige and reputation) were deeply unpleasant, and governments worldwide took note.

When traders or funds consider whether to buy bonds, they can rely on a long-standing ranking system that measures the reliability of the bond, i.e., the capacity and willingness of the issuer to make interest payments and redeem the debt. The three best-known bond rankings are provided by Fitch, Standard & Poor’s, and Moody’s.

The other advantage for broker affiliates is that bonds are easy to trade. A bond is essentially an interest-bearing promissory note issued by a reliable debtor. It’s relatively simple to explain bonds to novice traders and to create good quality educational content and SEO content. Bonds are similar in some ways to ETFs and stocks and often attract the same type of site traffic or trader demographics.

What Are the Best Bonds for Affiliates to Promote?

AvaTrade currently offers CFD (contracts for difference) trades on major US, Japanese, and European government bonds. When you’re promoting bonds and treasuries as a broker affiliate, it’s better to talk about bonds as a wider asset class and not focus on individual bonds themselves. You’re much more likely to connect with a broader audience and convert traffic in volume.

Top Tip: When you promote bonds, use terms like “government bonds,” “municipal bonds,” “corporate bonds,” and “mortgage-backed bonds”. They are useful ways to build trust and communicate the idea that bonds are reliable assets issued by competent authorities.

When you design social media creatives or marketing campaigns to promote bonds, there are several things that you can include to add some ‘spice’ to your content.

  • Traders can open CFD positions on bonds with up to 20:1 leverage.
  • Traders can play the markets with either Long or Short positions.
  • Available platforms include MetaTrader 4, MetaTrader 5, and WebTrader.

You can also mention that AvaTrade provides commission-free trading and competitive spreads for CFD bond trading. These are powerful incentives, both for experienced traders and for beginners. Nobody likes to sign up with online brokers who will chisel away at their trading profits.

How to Target Potential Bond Traders

The global bonds market is massive. The 2021 trading volume amounted to an estimated $119 billion. Bonds are a popular asset with major banks, pension funds, mutual funds, and other institutional investors. The fund managers like the relative stability and low risks that most bonds provide. They are a useful hedge in a diversified trading portfolio.

Bonds, like ETFs, are rapidly gaining popularity with ordinary online traders. People who’d previously signed up with brokers to trade forex, stocks, and commodities, are increasingly opting for less well-known assets. The availability of fast and convenient CFD trading places entire new asset classes within reach of independent traders.

When you promote bond trading as a broker affiliate, there are a few key demographics that you can initially focus on.

  • Forex and crypto traders who want to diversify their portfolios with low-risk assets.
  • People who already trade stocks, ETFs, and lower-risk commodities.
  • Newcomers to online trading who want to experiment with simple, low-risk assets.

If you’re serious about making money as a broker affiliate, you’ll already be reading (or at least checking) the financial press every day. You should also be signed up for trading alerts and signals. If you’re not, get started now!

Look out for news reports about investors switching to government bonds. This often happens when other markets experience a downturn, and institutional investors get jittery. You can follow up on any news reports with your own creatives. Bonds are also great subjects for guest posts and SEO content. Explore keywords like “safe investments,” “low-risk investments,” and “how to hedge portfolio.”

Promote CFD Bond Trading

Many potential bond traders are initially attracted to the idea of stable, low-risk investments. Not every online investor sees themselves as a high-powered crypto trader with a major appetite for risk. Plenty of people are delighted to earn lower profits over a longer time period through low-risk trading. This trading demographic is generally receptive to the idea of CFD trading.

CFDs can be ideal for this type of trader. As well as being fast and convenient (one-click trading), they are highly transparent. Traders can see at a glance exactly how much they are investing in each trade, as well as their potential ROI. There are three main advantages of CFDs.

Three Advantages of CFDs for Online Traders

  1. If the trade fails, the trader can only lose the actual sum invested in that trade. There is no further liability. This allows new traders to test the water and teach themselves the basics of bond trading while practicing a high level of risk management.
  2. It’s possible to profit from any change in asset value, up or down, with either a Call or Put position. If traders anticipate that a bond is about to decline in value, they can open a trade on that basis. It’s perfectly possible to make fast profits in a bear market or even just a temporary downturn.
  3. CFD traders don’t buy, sell, or own bonds. Profits from a contract for different trades are accrued from the difference between the bond price at the opening of a trade and the closing of a trade. Traders are attempting to profit from changes in the market value of the bond.

When you promote CFD bond trading online, it’s worth looking for sites, forums, and social media groups that appeal to a wider age group, as well as to both men and women and people who might not be currently considering online trading. You need to begin by targeting a whole spectrum of traffic and then optimizing your campaigns.

Many broker affiliates find bond traders receptive to more detailed, higher-level financial articles, news, and analysis and trading guides. They will often take the time to read and digest blog posts and will do their own research before they commit to signing up with an online broker. Bear this in mind and pitch your message accordingly. You should invest in top-quality financial, and educational materials as a matter of course, but try varying the tone when you promote bonds.

If you want to make money promoting bonds as a broker affiliate, you can start immediately at AvaPartner. Even new affiliates can earn high commissions in their first days as partners. There are some amazing opportunities when you work with a professional program, promoting a fully regulated international broker like AvaTrade.

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