Learning to Read Bond Market Tables

Reading bond market tables can be challenging, especially if you are used to stock market tables. For one thing, bond tables look different from the stock tables published in newspapers. The good news is that once you get used to the terms and basic information contained in a bond table, you will surely gain a better understanding of how you can invest and make money through bond exchanges. Below are some tips on how to read bond tables.

Common Terms Used in Bond Market Tables

  • Issuer–This term refers to the company or government entity that issued the bond. The issuer is essentially the borrower or debtor. The investor, by contrast, can be thought of as the lender or creditor.
  • Coupon or Rate–This is the interest rate that will be paid for by the issuer. For an investor, this represents the interest that will be earned if he invests and holds the bond for a specified period. A rate can either be fixed or variable.
  • Maturity Date–This refers to the date when the bonds become due. At this time, the issuer is required to pay the bond principal. In a bond table, the maturity date column shows the month and the last two digits of the year in which the bond will mature.

Standard Columns in Bond Tables

  • Percent Change–This column shows the difference between the original issue price and the current price of the bond.
  • Yield–This is one of the most important columns in the table because it shows how much the bond earns every year until the maturity date. The current yield is the current yield rate of the bond.
  • Bid–This column shows the average price that an investor would be willing to pay for a particular bond. The bid price is written as a percentage of the bond’s par, or face, value, and it is always shown above 100 percent.
  • Ask–This represents the issuer’s lowest asking price for the bonds.
  • High, Low, and Last columns–The High column represents the highest price that the bond has been sold for during the trading day, while the Low column shows the exact opposite. The Last column shows the last price at which the bond was traded during the day. If presented online, these columns represent real-time fluctuations in bond prices. For bond market tables published in newspapers, these columns represent price movements during the previous trading day.

Other Tips to Consider

  • Bond prices move up and down just as stocks do, although bond fluctuations are modest compared to those of stocks. The bond market prices shown in newspapers do not represent the actual or exact prices of the bonds for the day. Rather, the published figures are merely snapshots of how the different bonds are performing. For real-time figures, try to look for online bond tables.
  • Bond tables can come in different formats, but the most important details that you need to focus on include the interest rate, the maturity date, the current yield and the last or most recent price of the bond.
blog comments powered by Disqus
Scottrade