What is a clean price?
The net price is the value of a bond of less accumulated interest. When the accumulated interest is included in the quote, it is known as a full or dirty price. When bond prices are discussed and cited, people can use one price. It is important to know whether people talk about dirty or net prices when they quote bond values.
Bond has a nominal value and there is also interest that is regularly paid. This causes the full price of the bond to differ. When the interest was just paid, the dirty price and the net price are the same, because no interest so far. On the other hand, when the bond is halfway between paying, the dirty price is higher than the net price, because the bond has received interest, although it has not yet paid this interest.
Citation of bond values in net prices can provide a more stable way of looking at their value. The net price should remain relatively, although there are mitigating circumstances. F.LUMUNCY in values when clean prices are quoted is a sign that something is happeningAnd it may be beneficial to take a closer look.
On the other hand, when dirty prices are cited, the value of the bond rises and decreases. On the chart it looks like a saw. The irregularity of prices can cover basic trends that may affect the net price of the bond. This can sometimes be the advantage and disadvantage of others, depending on how someone is placed on the market.
In the United States, it is conventional to give citation in terms of net prices. Graphs may not always explicitly state this, because it is assumed that people will understand which price is used to provide information about values. If observers want to be sure they know what they are looking at, it is good to ask. Europeans are more likely to quote dirty prices in providing information about bond values.
When a bond is sold, the buyer pays a dirty price. As a result, it is important to realize the full price, even if someone primarily followsClean prices. Sellers want to make sure they receive real value, while buyers want to confirm that the right price is valid.