Close Navigation
Learn more about IBKR accounts

Principal Only (PO) Securities

Trading Term

A Collateralized Mortgage Obligation created by stripping the interest payments from the underlying mortgages. The POs are then sold at a deep discount to their face value. Ultimately, the face value is paid to the investors through both scheduled and early payments of the principal. Faster prepayments lead to a more rapid return of principal and, therefor, a higher yield.

IBKR Campus Newsletters

This website uses cookies to collect usage information in order to offer a better browsing experience. By browsing this site or by clicking on the "ACCEPT COOKIES" button you accept our Cookie Policy.