Series 82: 3.3.1.4.2. Bond Points And Basis Points

Taken from our Series 82 Online Guide

3.3.1.4.2. Bond Points and Basis Points

Bonds are quoted in the market in terms of their price and their yield to maturity. A bond “quote” just means the price at which a bond is trading, that is, its market price. The market price for bonds is quoted as a percentage of the bond’s par value. Percentages are expressed in terms of bond points. A bond point represents one hundredth, or 1%, of par. Thus, ten bond points is 10% of par, and five bond points is 5% of par. Because corporate bonds typically have a par value of $1,000, one bond point is equal to $10.

Corporate bonds are typically quoted in increments of one-eighth (see first two examples, following). They m

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