Skip to main content
Coupon, Face Value, Maturity, YTM

Bond Quotes Decoded

Pomegra Learn

Bond Quotes Decoded

Bond traders quote prices in 32nds and speak in mysterious shorthand. Learn to read it.

Key takeaways​

  • Bond prices are quoted as a percentage of par, often in 32nds (1/32 of a percent, or 0.03125%)
  • A quote of 102-16 means 102 and 16/32 percent of par, or $1,025
  • Bid-ask spread (the difference between what you can buy at and sell at) is typically 1–4 32nds for liquid bonds
  • Accrued interest is added to the quoted price when you settle; the quote is the "clean price"
  • Professional quotes include yield, duration, spread, and credit metrics alongside price

Price quotes: percentage of par and 32nds​

Bond prices are quoted as a percentage of the $1,000 face value. A quote of 100 means par ($1,000). A quote of 98 means $980 (98% of $1,000). A quote of 102 means $1,020.

But the quote includes fractions in 32nds. This dates back to the era when bond traders used paper and pencil; 1/32 was the smallest unit of precision.

Example: A quote of 102-16

  • 102 = 102% of par = $1,020.
  • 16 = 16/32 = 0.5% of par = $5.
  • Total: $1,020 + $5 = $1,025.

Another example: A quote of 99-8

  • 99 = 99% of par = $990.
  • 8 = 8/32 = 0.25% of par = $2.50.
  • Total: $990 + $2.50 = $992.50.

When you buy at a dealer quote of 102-16, you pay $1,025 per $1,000 face value. For a $100,000 face value bond, you pay $102,500.

Bid-ask spreads: the dealer's take​

Bond dealers quote a bid price (what they'll pay you) and an ask price (what they'll charge you). The spread is the difference.

Example:

Bid: 102-8 Ask: 102-12

This means:

  • Bid: 102 and 8/32 = 102.25% = $1,022.50 per $1,000 par.
  • Ask: 102 and 12/32 = 102.375% = $1,023.75 per $1,000 par.
  • Spread: 4/32 of $1,000 = $1.25 per $1,000 par.

If you want to sell, you get the bid ($1,022.50). If you want to buy, you pay the ask ($1,023.75). The dealer pockets the $1.25 spread per $1,000 par, which is their fee.

For liquid Treasury bonds, spreads are tight: 2–4 32nds (or tighter). For corporate bonds and less-liquid securities, spreads widen: 8–32 32nds or more.

Accrued interest and clean vs. dirty price​

The quoted price is the clean price — the price without accrued interest. But you pay the dirty price at settlement, which includes accrued interest owed to the seller.

Example:

  • Bond coupon: 5% annually, paid on Jan 1 and Jul 1.
  • Today: Jun 1 (30 days into a 181-day coupon period).
  • Clean price (quoted): 102-16 = $1,025.
  • Accrued interest: ($50 coupon × 30 days / 181 days) = $8.29.
  • Dirty price (what you actually pay): $1,025 + $8.29 = $1,033.29.

This matters for your cash management and accounting. When you buy a bond, the settlement invoice shows both the clean price and accrued interest.

Complete quote example: a Treasury bond​

A professional quote for a Treasury bond might look like:

USDT 2.0% due 8/15/2032

  • Bid: 101-12
  • Ask: 101-14
  • Bid yield: 1.78%
  • Ask yield: 1.76%
  • Change from yesterday: +0-04 (up 4/32)

Unpacking:

  • Bond identifier: U.S. Treasury, 2% coupon, matures Aug 15, 2032.
  • Bid price: 101-12 ($1,013.75 per $1,000 par).
  • Ask price: 101-14 ($1,014.38 per $1,000 par).
  • Bid yield: if you sell at the bid price, the buyer's yield-to-maturity is 1.78%.
  • Ask yield: if you buy at the ask price, your yield-to-maturity is 1.76%.
  • Change: the price is up 4/32 since yesterday (the bond appreciated as yields fell).

Notice: yields move inversely to prices. Lower ask price = higher ask yield.

Corporate bond quotes: more information​

Corporate bond quotes include additional data:

ACME Corp 5.5% due 6/15/2035, A rating

  • Bid: 103-08
  • Ask: 103-12
  • Bid yield: 4.85%
  • Ask yield: 4.81%
  • Bid spread: +165 bps (basis points, or 1.65%)
  • Ask spread: +161 bps
  • Price change: 0-08 (up 8/32 today)
  • Duration: 7.3 years
  • Volume: $5.2 million (liquid)

New information:

  • Spread: bid is 165 basis points over the benchmark Treasury (likely the 7-year Treasury). Ask is 161 bps.
  • Duration: 7.3 years tells you the bond's interest-rate sensitivity.
  • Volume: $5.2M traded today; higher volume suggests liquidity.

A dealer or professional investor would use all this data to assess the bond's value.

Bloomberg terminal jargon​

Bloomberg terminals (used by professionals) display bonds with terse abbreviations and color coding:

Example on Bloomberg for a corporate bond:

US92189XAA23 ACME 5.5 06/15/35 Mtdy=5.35 YAS=4.82 OAS=154 Dur=7.2

Unpacking:

  • US92189XAA23: CUSIP (unique bond identifier).
  • ACME: issuer name.
  • 5.5: coupon rate (5.5%).
  • 06/15/35: maturity date (June 15, 2035).
  • Mtdy=5.35: mid-yield (average of bid and ask yield).
  • YAS=4.82: yield-to-assumption (a modified yield accounting for call dates).
  • OAS=154: option-adjusted spread, 154 basis points over a swap benchmark.
  • Dur=7.2: duration, 7.2 years.

Professional traders glance at this and immediately understand the bond's value, risk, and relationship to alternatives.

Tradeweb and dealer platforms​

Tradeweb is an electronic platform where institutional dealers post bond prices. A typical Tradeweb listing:

Issuer: General Motors Coupon: 4.25% Maturity: 3/15/2030 Bid: 102-04 Ask: 102-08 Bid YTM: 3.64% Ask YTM: 3.60% Bid OAS: 145 bps Trade time: 2:47 PM

Traders use Tradeweb to post live prices, do RFQs (requests for quotes), and execute trades. The bid-ask spreads and volumes update continuously.

How to compare bonds using quotes​

Two corporate bonds with similar maturity:

Bond A: ACME 5.5%, due 2035

  • Price: 103-12
  • YTM: 4.81%
  • OAS: 161 bps
  • Duration: 7.3 years
  • Rating: A

Bond B: BETA 4.8%, due 2034

  • Price: 100-20
  • YTM: 4.75%
  • OAS: 158 bps
  • Duration: 6.8 years
  • Rating: A

Which is better value?

  • Bond A yields 4.81% vs. Bond B's 4.75% — Bond A is 6 bps higher, appealing for income.
  • Bond A's OAS is 161 bps vs. Bond B's 158 bps — Bond A offers 3 bps more spread for credit risk. Tight difference.
  • Bond A's duration is longer (7.3 vs. 6.8 years) — Bond A is more interest-rate sensitive.
  • Bond A's price is higher (premium) — Bond A trades at 103-12, Bond B at par-ish (100-20).

If you believe rates will stay stable, Bond A's higher yield and duration might appeal. If you expect rising rates, Bond B's shorter duration and lower price are appealing. The quote data lets you make an informed choice.

Quoted spread formats​

Different quotes may use different spread definitions:

  1. Z-spread (zero-volatility spread): the constant spread over the Treasury curve that makes the bond's price equal to the Treasury benchmark. Often expressed in basis points over the curve.
  2. OAS (option-adjusted spread): the Z-spread adjusted for embedded options (calls, puts).
  3. I-spread (interpolated spread): the spread over the interpolated Treasury yield of the same maturity.

For most investor purposes, you see OAS in quotes. Professionals care about the distinction, but recognizing the acronym is sufficient.

Flowchart: reading a bond quote​

Practical example: buying a Treasury STRIP​

A Treasury STRIP quote:

STRIPS (zero-coupon), matures 8/15/2040

  • Bid: 25-15
  • Ask: 25-18
  • Bid Yield: 4.05%
  • Ask Yield: 4.03%
  • Duration: 14.8 years

Unpacking:

  • Price: 25 and 15/32 = 25.469% of par. For a $1,000 face value, that's $254.69.
  • You pay $254.69 today and get $1,000 in 2040 (15 years), for a 4.03% annualized return.
  • Duration of 14.8 years means the bond is very sensitive to rate moves.
  • Bid-ask spread: 3/32 is tight, consistent with Treasury liquidity.

This is a classic long-term zero-coupon investment, perfect for a college fund or Roth IRA.

Summary: decoding the quotes​

Bond quotes use shorthand (32nds, spread basis points, duration) that looks cryptic until you practice. Once you understand the format, you can compare bonds fairly, identify opportunities, and understand a dealer's markup.

The bid-ask spread is how dealers profit; wider spreads on less-liquid bonds reflect the difficulty of finding buyers or sellers. The OAS and duration tell you about risk and rate sensitivity. Together, these data points paint a complete picture of the bond's value.

Next​

Now that you can read quotes and understand bond prices, yields, and spreads, we wrap up with a reference sheet: the bond math cheat sheet. One page of formulas and key metrics for quick lookup.