Full bond price
Bond trading funds are delivered at full price, with full price buying = net buying price+accrued interest, full price selling = net selling price+accrued interest, and accrued interest = coupon rate /365× interest-bearing days × bond face value (100). When settling funds with investors, it is calculated at full price: settlement amount = net transaction price+accrued interest.
situation
1July 020006 The value date of the bond is June 6, the holding days are 4 1 day, the face value is 100 yuan, and the annual interest rate is 2%, including interest100× 2%/365× 41= If it is sold at net price, the net price transaction shall be listed at net price, and the actual receipt and payment of funds shall be calculated at full price.
According to the regulations, it is meaningful to carry out net price trading in OTC bond trading, because the net price can truly reflect the change of bond value, which is beneficial for investors to analyze and judge the bond trend. Because in the case of constant bond value, with the increase of holding days, the full price naturally rises. If we only observe the full price, there will be the illusion of bond appreciation. Only the change of net price indicates the change of bond value. The net price of this bond from the date of issue to the time of sale is 100 yuan, without any appreciation, but the full price has risen to 100.22 yuan.
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Net bond price
The net bond price is the total bond price minus accrued interest. Usually, the bond prices in the market are net transactions, and the bond prices we see on SSE are all net prices. The full price equals the net price plus accrued interest. Book-entry bond transactions are quoted at a net price, that is, the price excluding accrued interest due to natural growth. The transaction price in the net price trading mode does not include accrued interest, and the formation and change of its price can more accurately reflect the intrinsic value of national debt, the relationship between supply and demand and the changing trend of market interest rate.
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accrued interest
After the bond is issued, investors can trade between the scheduled interest payment dates. In this case, the buyer needs to pay the accrued interest to the seller until the trading day, because the buyer will get the full coupon income on the next interest payment date, but the seller can't get any coupon income on the interest payment date, so the seller should get the coupon income during the bond holding period, so the buyer needs to "compensate" the seller to some extent. Interest income from the last interest payment date to the trading day is called accrued interest.
The relevant expressions of bond information are shown in the table below.
Bond information table
skill
Why should the bond market carry out net price trading?
After the implementation of net price trading, the actual price of national debt can be more accurately reflected, which is convenient for investors to make timely and direct judgments on market prices.
When trading at full price, the market price change of national debt is affected by the following two aspects:
The first is the change of market interest rate and the relationship between supply and demand. For example, the transaction price of "100 yuan face value and 4% annual interest rate" national debt may fluctuate on the basis of 100 yuan face value with the change of market interest rate, and the price will rise or fall due to the imbalance between market supply and demand, which is actually "net price".
The second is debt interest. The price of national debt will rise with the natural increase of interest, and the price is reflected in "accrued interest". After half a year, the market price of "100 yuan with an annual interest rate of 4%" included the accrued interest of 2 yuan.