Investing Guide: Deals to Be Had in U.S. Treasury Bonds: "If you own these or other low coupon, callable bonds, you can sell them, buy the portfolio of strips that replicates the cash flows of the minimum of the equivalent of short and long bonds, and profit in the process. Strips are zero-coupon bonds created from either the principal or individual coupons of U.S. Treasury bonds. The task is not as difficult as you might think. If you want to buy strips that duplicate a bond with a 10 percent coupon maturing in a year, for example, you would buy 5 percent of the strip maturing in six months and 105 percent of the strip maturing in one year. That way you get the same cash flow as the bond with the 10 percent coupon--$105."