- Common Options Embedded in a Bond Issue
- General Characteristics of Bonds
- Accrued Interest, Clean Price, and Dirty Price
- Bond Spreads
- Bid-Ask Spread of Bonds
- Impact of Liquidity on Bond Spreads
- Treasury STRIPS
- Floating Rate Notes
- Inflation-Indexed Bonds
- How to Read Bond Tables?
- How to Read Bond Quotes?
- “Pull to Par” of Bond Prices
How to Read Bond Tables?
Once you know how to read bond quotes, you can easily interpret bond price tables given in newspapers or websites.
We will take the example of Treasury bond prices, as shown in the table below:
Rate: The first column shows the rate, i.e., the coupon paid by the bond. Note that the highlighted bond pays a coupon of 8 7/8%
Maturity Date: The second column shows the maturity of the bond. In the above table both the bonds mature in Feb 2016.
Bid and Ask Prices: The next two columns show the bid and ask prices. Bid price is the maximum price offered for the bond and the ask price is the minimum price asked for the bond. The highlighted bond can be sold at 100-02 (100+2/32= 100.0625) and purchased at 100-04 (100 + 4/32 = 100.125)
Change: The change just shows the change in price from the previous close.
Yield: This represents the yield to maturity of the bond, i.e., the internal rate of return of the bond.