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CFDs and forex (FX) are complex instruments and come with a high risk of losing money rapidly due to leverage. 62% of retail investor accounts lose money when trading CFDs with this provider.
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CFDs and forex (FX) are complex instruments and come with a high risk of losing money rapidly due to leverage. 62% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs, FX, or any of our other products work and whether you can afford to take the high risk of losing your money.
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Bonds

Bonds - The price of a bond (part 1)

Level: Beginner / Length: 7 minutes

This module is part one of two on the topic of the price of bonds. The course is the beginning of our exploration of bond trading in the secondary market.

This ‘secondary market’ is the place in which all bonds trade once the initial primary market issue has taken place. It is in this secondary market that the price of a bond is important for bond investors. We need to understand the quoted price for a bond known as the clean price. And in this first topic we begin by showing you how to calculate the cash equivalent of the clean price of the bond. We’ll also explain why the investor pays the ‘dirty price’ for a bond rather than just the clean traded price. 

We’ll look at:

  • The price of a bond is a percentage. What does this mean?
  • Trading the ‘clean’ price of a bond
  • Coupon accruals
  • The invoice or ‘dirty price’ of a bond
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