Prices in the app are quoted as a percentage of the face value of the bond. Unlike stocks & ETFs, bond figures display the Annual Return or Yield to Maturity (YTM) based on the ask price over the given timeframe (in %). Here's what you need to know:
- Bonds are quoted in percentages to represent their current market price relative to their face value.
- The face value of a bond is the amount that the bond will be worth when it matures and is repaid by the issuer.
- The price of a bond is determined by supply and demand. It can trade above, at, or below the face value.
As an example, let's consider a bond with a face value of €100 that, when quoted at 100%, holds a real value of €100. If the quotation rises by +5% to 105%, the same €100 face value translates to an actual worth of €105.