What is a Bond Quote?

Bond quotes are simply the current quoted price for a given bond. The actual bond quote may be based on the current trading value of the bond in question, or be based on a bond price that anticipates the future worth or performance of the bond. Determining the bond quote, however, is a little more involved that simply arriving at arbitrary bond prices. In fact, there are a couple of factors that will impact the final calculation of the bond quote as the bond is made available for sale.

Generally, the bond quote is presented or expressed in relation to the percentage of the par for the bond. The percentage of the par will vary, depending on the nature of the bond. For corporate bonds, the usual percentage of par with increments is calculated at 1/8. Along with the corporate bond, there is also the government bond to consider. In the case of government bonds, the usual percentage of par with increments is calculated at 1/32.

Investors rely on the bond quote to determine whether or not choosing to invest in the bond is a good idea. Along with investigating the rate of return associated with the bond, it is also important to consider the amount of the initial investment. Along with the initial costs, any associated charges that apply to the process of acquiring the bond, and what types of terms and conditions are associated with realizing the promised return on the bond are also important. Generally, these are all pieces of information that are included with the documents that provide the final bond quote.

Bonds tend to be considered relatively stable investments where the guarantee of a return on the investment is very high. The bond quote lays the foundation for evaluating the overall costs associated with the venture, the degree of risk that is associated with acquiring the bond, and information about the projected pay out and schedule for realizing a return.