What this market video covers
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 twenty dollars of accrued interest and a twenty dollar transaction charge. The cash total becomes nine thousand nine hundred forty dollars. Accrued interest compensates the seller for interest earned before settlement. It is separate from the transaction charge. This example assumes the quote excludes accrued interest and the charge has not already been included. Market conventions differ, so avoid adding an embedded charge twice. Read the quote basis, face amount, accrued interest and charges before comparing an advertised price with settlement cash. Clearly labeled hypothetical worked example; figures are illustrative, not current company results. Educational content, not personalized investment advice. Sources: https://www.finra.org/investors/investing/investment-products/bonds#buying-and-selling https://accruedinterest.nga.finra.org/calculator/ #Bonds #AccruedInterest #FixedIncome #FinancialEducation #Shorts
Use this analysis as general education. Confirm current prices and conditions independently, define invalidation before entry, and size every position for the loss you can actually tolerate.