1. In banking, the situation where the total duration of a bank's assets is shorter than that of its liabilities. Hence the duration of its equity is negative because its long-term liabilities are funded by its short-term assets. The theoretical value of the bank's equity will rise and fall with the rise and fall of interest rates. 2. In securities trading, an uncommon situation where the traditional yield-price ratio is reversed: a bond's price increases as the interest rates go up, and decreases when the interest rates fall. For example, a callable bond with the call in effect will sell at a yield that is about the same as the coupon rate. Any fall in its yield will not increase its price because it is already selling at its peak price due to the call. The term 'duration' refers to modified duration which is the Macaulay duration adjusted for compounding.

Related information about negative duration:

1. What is negative duration? definition and meaning
   Definition of negative duration: In banking, the situation where the total duration of a bank's assets is shorter than that of its liabilities. Hence the duration of its ...
    
2. FRN's & negative duration
   Apr 16, 2009 ... Floating rate notes (FRN's) can exhibit a curious property called negative duration. An FRN is a bond whose coupon is not fixed, but rather ...
    
3. Can someone explain what is negative duration ? | Bionic Turtle
   As per the definition "Duration is the average time one has to wait till the payment is received". Going by this if, say, duration is 2.5 years means ...
    
4. Negative Duration - Financial Dictionary - The Free Dictionary
   Negative Duration. 0.01 sec. Negative duration. Occurs when the price of an MBS moves in the same direction as interest rates. Negative Duration. 1. A situation ...
    
5. Negative duration Definition - NASDAQ.com
   Negative duration: read the definition of Negative duration and 8000+ other financial and investing terms in the NASDAQ.com Financial Glossary.
    
6. Negative duration
   Similar financial terms. Negative pledge clause. A bond covenant that requires the borrower to grant lenders a lien equivalent to any liens that may be granted in ...
    
7. Duration and Convexity
   You can also achieve a negative duration by shorting fixed income instruments or paying fixed for floating on an interest rate swap. Inverse floaters tend to have ...
    
8. Understanding duration - PIMCO
   A portfolio with a negative duration will increase in value when interest rates rise, barring other impacts. PIMCO and duration. Because interest rate expectations ...