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Price, Premium, Discount, and Par

Bond price terms for par, premiums, discounts, below-par pricing, and unamortized bond premiums or discounts.

Price, premium, discount, and par terms explain how a bond’s market price compares with its face value.

Use this branch when a bond trades above par, below par, at par, or with an accounting premium or discount that affects yield, amortization, tax reporting, or carrying value.

What This Branch Covers

AreaUse it for
Par, Premium, and Discount Bond PricingPar bonds, premium bonds, discount bonds, below-par prices, bond premiums, and bond discounts.
Deep Discount and Amortized Premium or DiscountDeep-discount bonds, shallow discounts, amortizable premiums, and unamortized premium or discount balances.

Example

A bond with 1,000 face value quoted at 96 is priced at about 960 before accrued interest and transaction costs. A bond quoted at 104 trades at a premium. The investor still needs to check coupon, maturity, call schedule, tax treatment, and yield measure before comparing the two.

Common Mistakes

  • Calling a discounted bond cheap without checking credit risk, maturity, coupon, and liquidity.
  • Ignoring that premium bonds may be called before the investor earns the expected yield.
  • Confusing price as a percentage of par with the actual settlement amount.
  • Treating accounting amortization as the same thing as market value.

In this section

Choose a subsection first. Deeper term pages live inside each subsection, which keeps large topic hubs readable.

Amortized Discount

Fixed-income terms for deep discounts, shallow discounts, amortizable bond premiums, and unamortized bond premium or discount balances.

Par Premium Discount

Fixed-income terms for par bonds, premium bonds, discount bonds, below-par prices, bond premiums, and bond discounts.

Revised on Sunday, June 21, 2026