A bond quote communicates a bid, offer, price, yield, or spread for a stated security and size, but may be firm, subject, or merely indicative.
A bond quote communicates a price, yield, or spread at which a dealer or market participant may buy or sell a specified bond for a stated size and under stated conditions. A quote is not automatically a completed trade or a binding commitment; its side, timestamp, size, and firmness must be known.
Many bonds are quoted as a percentage of face value. A price quote of 98.25 generally means 98.25% of par, but settlement can also include accrued interest, fees, and product-specific conventions.
| Field | Question to ask |
|---|---|
| Security | Which CUSIP, ISIN, issuer, coupon, maturity, seniority, and call structure? |
| Side | Is the dealer bidding to buy or offering to sell? |
| Price basis | Clean price, dirty price, yield, spread, discount margin, or another convention? |
| Size | What face amount is available at that level? |
| Firmness | Firm, subject, indicative, or workable? |
| Time | When was the quote made and for how long is it valid? |
| Settlement | Which settlement date, currency, depository, and delivery terms apply? |
| Conditions | Minimum denomination, investor eligibility, all-or-none, or other restrictions? |
Without this context, two numbers that look comparable may represent different trades.
Suppose a dealer quotes a corporate bond 98.10 bid / 98.60 ask for $500,000 face value.
The economic transaction cost cannot always be inferred from the displayed spread alone. Dealer compensation, platform fees, market movement, and principal-versus-agency capacity can matter.
Assume an investor buys $5,000 face value of a 6% fixed-rate bond quoted at a clean price of 98.25.
The clean principal amount is:
$5,000 x 98.25% = $4,912.50.
The bond pays interest semiannually, so each six-month coupon is:
$5,000 x 6% / 2 = $150.
Using a simplified 180-day coupon period, assume 60 days of interest have accrued:
$150 x 60 / 180 = $50.
The dirty or full amount before fees is:
$4,912.50 + $50 = $4,962.50.
Actual accrued interest follows the bond’s day-count convention, coupon dates, and settlement date. The example does not include commission, markup, tax, or settlement adjustments.
A price of 100 is par, below 100 is below par, and above 100 is above par. Price relative to par does not reveal whether a bond is cheap or expensive. Coupon rate, market yield, credit, maturity, calls, and liquidity explain the relationship.
A quote can state yield to maturity, yield to call, yield to worst, current yield, or another measure. The measure and assumptions must be named. Yield to maturity assumes contractual payments, reinvestment conventions, and no default; it is not a guaranteed realized return.
A spread quote states yield compensation over a reference curve or model, such as a Treasury spread or option-adjusted spread. Two spread measures can differ because of benchmark, cash-flow, option, and interpolation assumptions.
U.S. Treasury notes and bonds are commonly quoted in points and thirty-seconds. A quote of 99-16 means:
99 + 16/32 = 99.5% of face value.
For $100,000 face value, that equals a clean principal amount of $99,500 before accrued interest. Additional fractional conventions can apply, so the complete notation and platform rules must be read.
| Evidence | What it shows | Main limitation |
|---|---|---|
| Firm quote | Current commitment subject to stated size and conditions | Can expire or be withdrawn under applicable rules and circumstances |
| Indicative quote | Approximate level where interest may exist | Not a commitment to execute |
| Workable indication | Dealer’s revisable potential willingness to purchase, especially in municipal usage | Dealer can recheck or revise before execution |
| Reported trade | Price, yield, size, and time of a completed transaction | Historical; size, side, and market may differ |
| Evaluated price | Model or pricing-service estimate used for valuation | May not be executable, especially for illiquid bonds |
| Dealer run or inventory list | Securities and levels circulated by a dealer | Can be stale, subject, or size-dependent |
FINRA states that TRACE disseminates eligible fixed-income trade data, not quotes, and has no execution capability. A TRACE print can inform a negotiation but cannot be accepted like a live offer.
This article provides general fixed-income education, not personalized investment, valuation, tax, legal, or execution advice. Confirm current security terms and an all-in executable price before trading.