Bond Quote

« Back to Glossary Index

What Is a Bond Quote?

A bond quote is the last price at which a bond traded, expressed as a percentage of par value and converted to a point scale. Par value is generally set at 100, representing 100% of a bond’s face value of $1,000. For example, if a corporate bond is quoted at 99, that means it is trading at 99% of face value. In this case, the cost to buy each bond is $990.

Key Takeaways

  • A bond quote refers to the last price at which a bond traded.
  • Bond quotes are expressed as a percentage of par (face value) and converted to a point scale.
  • The par value is traditionally set at 100, which represents 100% of a bond’s $1,000 face value.
  • Bond quotes may also be expressed as fractions.


Bond Quote

How a Bond Quote Works

Price quotes for bonds are represented by a percentage of the bond’s par value, which is converted to a numeric value, then multiplied by 10, in order to determine the cost per bond. Bond quotes can also be expressed as fractions.

For example, corporate bonds are quoted in 1/8 increments, while government bills, notes, and bonds are quoted in increments of 1/32. Therefore, a bond quote of 99 1/4 represents 99.25% of par. Converting the percentage to 99.25 and multiplying by 10 results in a cost of $992.5 per bond. In addition to being quoted as a percentage of par value, bonds may also be quoted with a yield to maturity (YTM).

The bond price and quote the calculation is fairly straightforward, compared to other types of investments.

Types of Bond Quotes

In addition to the last price at which a trade occurred, full bond quotes include bid and ask prices, which are calculated in the same manner as the quote on the last trade. The bid is the highest price level buyers are willing to pay for the bond at the time of the quote. For bond sellers seeking immediate trade executions, the bid is the likely price for the trade. The ask is the lowest price level on bonds to be sold at the time of the quote.

The difference between the bid and the ask price is known as the “spread.” In a full quote, bonds with high levels of liquidity, such as Treasuries, generally have spreads of a few pennies between the bid and the ask price. On the other hand, the spreads on corporate bonds with lower levels of liquidity can exceed $1. For example, a full quote on an illiquid corporate bond could list a last trade of $98, with a bid of $97 and an ask price of $99.

Bonds can also be quoted in terms of their yields to maturity, which is commonly done for reference purposes, rather than trade execution. For example, the financial media often quotes the 10-year Treasury note by its YTM, to give investors a reference point for bond price fluctuations.

Compete Risk Free with $100,000 in Virtual Cash

Put your trading skills to the test with our FREE Stock Simulator. Compete with thousands of Investopedia traders and trade your way to the top! Submit trades in a virtual environment before you start risking your own money. Practice trading strategies so that when you’re ready to enter the real market, you’ve had the practice you need. Try our Stock Simulator today >>

« Back to Glossary Index