Final Thoughts: Is This Fixed Income Book Worth Reading?
We made it. Nine chapters. One complete retelling series. And now the question: was this book actually worth the time?
Short answer: yes. With some caveats.
📖 Book: Trading the Fixed Income, Inflation and Credit Markets: A Relative Value Guide 👤 Authors: Neil C. Schofield, Troy Bowler 🔢 ISBN: 978-0-470-74229-7
What This Book Gets Right
The relative value framework is genuinely useful. The idea that every market view can be expressed through spot, forward, swap, or options is not just academic theory. It is how professional traders actually think. The book hammers this point across every chapter, and by the end it sticks.
It is practical, not theoretical. There is math in this book, sure. But it is always in service of a trading idea. You will not find pages of proofs with no connection to reality. Every formula leads to a trade. Every concept has a worked example. That matters.
The cross-asset approach works. Most fixed income books cover bonds and stop there. This one takes the same framework and applies it to credit and inflation markets. Seeing the same principles work across different asset classes really drives home the point.
The trading axioms chapter is gold. Chapter 9 has no formulas. No diagrams. Just decades of market wisdom compressed into a few pages. It is the kind of chapter you come back to. Not because you forgot the content, but because you need the reminder.
The forward price concept is a recurring theme that pays off. The distinction between forward prices and expected prices keeps coming up. By the end of the book, you understand it deeply. And once you do, you see markets differently.
What Could Be Better
Some parts feel dated. The book was published in 2011. The data, examples, and market conventions all reflect a pre-Basel III world. LIBOR is referenced throughout, and we know how that story ended. The credit chapter discusses CDOs and CDO-squareds in a way that feels very much of its time.
That said, the underlying concepts have not changed. Relative value is relative value. The instruments evolve, but the thinking stays the same.
The math gets heavy in places. The pricing chapters (especially around credit derivatives and inflation swaps) can be dense. If you are not comfortable with duration, convexity, and basic derivatives pricing, some sections will require multiple reads.
The inflation chapter feels a bit thin compared to credit. The authors acknowledge this themselves. The inflation market was less developed when they wrote the book, and it shows. There is less depth on trading strategies and fewer worked examples than in the fixed income and credit chapters.
Some topics deserved more space. The options sections across the book feel rushed. Volatility trading, skew, and the term structure of implied vol all get surface-level treatment. If you want deep options knowledge, you will need a dedicated book.
Key Takeaways From the Entire Book
If I had to distill the whole thing into a handful of lessons:
Relative value is about expressing views optimally, not just finding cheap assets. The best trade is not always the obvious one. It is the one that gives you the best risk-adjusted exposure to your view.
Forward prices are not forecasts. This is the single most important concept in the book. The forward price is what is implied by today’s market. It is not what the market expects to happen. Understanding this difference changes everything.
Carry matters. In fixed income, you get paid (or you pay) just for holding a position over time. Carry is not a free lunch, but it is a real component of returns that many people underestimate.
Liquidity premiums are real and significant. The inflation chapter makes this point clearly, but it applies everywhere. The price you see in the market is not purely about fundamentals. It includes compensation for illiquidity, and that can be a big number.
The market does not care about your thesis. From the trading axioms: if you are right and the market is wrong, you lose. Discipline and risk management beat intelligence every time.
Curve trades are underrated. Most people think about direction. Up or down. But some of the best risk-adjusted trades come from views on the shape of the curve. Steepeners, flatteners, butterflies. The book spends two full chapters on this and it is worth it.
Know who the natural players are. In every market, there are structural buyers and sellers. Pension funds, insurers, corporations, central banks. Understanding their motivations tells you a lot about why prices are where they are.
Who Should Read This Book
Yes, read it if:
- You work (or want to work) in fixed income, credit, or inflation markets
- You understand the basics and want to level up to relative value thinking
- You want a practitioner’s perspective, not an academic one
- You are studying for a finance role and want practical knowledge alongside your textbook theory
Maybe skip it if:
- You want a pure introduction to bonds (start with Fabozzi instead)
- You need current market data and conventions (supplement with newer sources)
- You hate math and do not want to work through numerical examples
- You are looking for equity or FX content (this is purely fixed income, credit, and inflation)
Overall Impression
This is a solid book. Not perfect. Not always exciting. But genuinely useful for anyone who wants to understand how professional traders think about fixed income markets.
The relative value framework gives you a mental model that works. The worked examples show you how to actually apply it. And the trading axioms remind you that all the fancy analysis in the world is worthless without discipline.
If you are serious about understanding how these markets work, this book belongs on your shelf. Just keep in mind that it was written in 2011 and supplement it with current market knowledge.
Thanks for following along with this series. I hope it made a dense textbook a little more accessible.
Full Series
- Introduction to the Series
- Product Fundamentals: Bonds, Repos and Derivatives
- Pricing Relationships and the Relative Value Framework
- Pricing Relationships: Forwards, Swaps and Basis
- Market Risk in Fixed Income
- Expressing Views on the Market: Hedging and Trading
- Identifying Value in Sovereign Bonds
- Sovereign Bond Trading: Spreads, Switches and Butterflies
- Yield Curve Trading Strategies
- Yield Curve Trading: Butterflies, Boxes and Carry
- Credit Relative Value: Basics of Credit Trading
- Credit Relative Value: CDS, Indices and Structured Products
- Credit Trading: Basis, Curves and Capital Structure
- Credit Trading: Single Name and Portfolio Strategies
- Relative Value in Inflation: Breakeven Rates, Real Yields and Linkers
- Trading Axioms: An A to Z of Market Wisdom
- Final Thoughts (you are here)