Bond Quotes vs. Final Cash Invoice Explained
Summary
Hollow Point Trading shares an explanation of why a bond quote is not necessarily the final cash invoice. Using a hypothetical coupon bond quoted at 98 and a $10,000 face-value purchase, it distinguishes the $9,800 quoted principal from additional charges shown on the trade confirmation. Understanding the difference helps investors estimate the actual amount due.
https://youtu.be/ucWq83uh0dg
A bond quote of ninety eight is not the final cash invoice #Bonds #...
A bond quote is not automatically the final cash invoice. Consider a hypothetical coupon bond quoted at ninety eight per hundred of face value. You buy ten thousand dollars of face value. The quoted principal amount is nine thousand eight hundred dollars, not ninety eight dollars. Suppose the trade confirmation separately states one hundred twen...
