Bond Quote: Definition and How to Read It A bond quote shows the current market price and key details of a bond. Quotes let investors compare bonds, assess value, and decide whether to buy, hold, or sell. Key points
* Quotes are usually expressed as a percentage of the bond’s face (par) value.
* Par is commonly $1,000 (sometimes $100). A quote of 98 equals 98% of par = $980; 102 equals 102% of par = $1,020.
* Quotes may also be shown as yields, spreads, or dollar prices depending on the market and bond type.
How a Bond Quote Works Bond prices change in response to interest rates, credit ratings, and market conditions. The quoted percentage converts directly to a dollar price by multiplying the percent (as a decimal) by the bond’s par value. For example:
* Quote = 101.25 → Price = 1.0125 × $1,000 = $1,012.50.
If a market lists prices per $100 of par, multiply that quote by 10 to get the per-$1,000 price. Explore More Resources
How to Read a Bond Quote (Example) Example quote: VZ40 - 101.25 - 3.892% - 06/30/28 - 5% - AA Breakdown:
Ticker (VZ40): Identifier for the bond.
Price (101.25): Percent of par (101.25% of $1,000 = $1,012.50).
Yield (3.892%): Usually yield to maturity — the annualized return if held to maturity.
Maturity date (06/30/28): When principal is repaid.
Coupon (5%): Annual interest rate paid on the bond’s par value.
Credit rating (AA): Rating of issuer creditworthiness; higher ratings indicate lower default risk. Explore More Resources
An investor buying this bond at $1,012.50 would receive the 5% coupon and an estimated yield of 3.892% if held to maturity. Additional Quote Elements
* Bid and Ask: Bid is the highest price a buyer will pay; ask (offer) is the lowest price a seller will accept. The difference is the spread.
* CUSIP: A unique identifier used to track and trade individual bonds.
* Last trade vs. quote: Some displays show the most recent trade price, others show current bid/ask or yield.
Common Types of Bond Quotes
* Face-value (price) quotes: Shown as a percentage of $1,000 (or $100). Common for U.S. Treasuries.
* Yield quotes: Shown as the bond’s yield to maturity; common for corporate and municipal bonds.
* Spread quotes: Shown as basis points over a benchmark (e.g., +175 bps over Treasuries).
* Pure price (dollar) quotes: Quoted as a dollar amount rather than percentage; often used for securities with nonstandard par values (e.g., some mortgage-backed securities).
Electronic platforms (e.g., FINRA TRACE for corporate/municipal and EMMA for municipal bonds) provide many bond quotes, though some bonds trade over-the-counter and can be less transparent. Explore More Resources
How Interest Rates Affect Quotes Bond prices and market yields move inversely:
When interest rates rise → existing bond prices typically fall (quotes decrease).
When interest rates fall → existing bond prices typically rise (quotes increase). Premiums and Discounts
* Premium: A bond trading above par (quote > 100). Often occurs when the coupon rate is higher than current market rates.
* Discount: A bond trading below par (quote < 100). May reflect lower coupon rates or diminished issuer credit quality.
Practical Notes
* Liquidity matters: Highly liquid bonds (e.g., Treasuries) have tight bid/ask spreads; less liquid corporate bonds can have wide spreads.
* Compare by yield or spread rather than price alone to evaluate return and relative risk.
* Use broker platforms, financial data services, or regulatory systems to obtain up-to-date quotes.
Conclusion Understanding bond quotes — price, yield, maturity, coupon, credit rating, bid/ask, and any spreads — is essential to evaluating fixed-income investments. Reading quotes correctly enables clearer comparisons across bonds and better-informed trading or investing decisions. Explore More Resources