How to read a bond yield

Price and yield move in opposite directions

A bond pays fixed cash: a set coupon each year and its face value (par, usually 100) at maturity. If the market price of that fixed stream rises, a buyer paying the higher price earns less return — so the yield falls. If the price falls, the yield rises. Price and yield always move in opposite directions.

Prices are quoted per 100 of face value. A bond at 101.11 trades slightly above par; one at 98.27 trades below. Above par, the yield is below the coupon; below par, the yield is above it.

"Yield to maturity" is the number that matters

The headline yield on this site is yield to maturity (YTM): the annualised return you'd earn if you bought at the current price and held the bond to the end, collecting every coupon and the final repayment. It rolls the coupon income and any gain or loss versus today's price into a single comparable figure — which is why two bonds with very different coupons can be compared fairly by their YTM.

Why there are two yields: bid and ask

Bonds trade through dealers who quote two prices at once:

• The bid — the price a dealer will pay to buy the bond from you (so it's the price you could sell at).
• The ask (or offer) — the price a dealer will sell the bond to you (the price you'd buy at).

The ask price is always a little higher than the bid — that gap is the dealer's spread. And because price and yield move in opposite directions, the higher ask price produces the lower yield. So on every row:

Bid yield > ask yield. That isn't a glitch — it's the direct consequence of the bid price being lower than the ask price.

A worked example

Take a real row from the Nigeria tab (a snapshot):

The ask price (101.11) is higher than the bid (100.86), so the ask yield (5.74%) is lower than the bid yield (5.77%). If you were selling, the bid side is your reference; if buying, the ask side. The roughly 3–4 basis-point gap between them is the quoted spread (a basis point is one-hundredth of a percent, so 0.03% = 3bp).

Reading the rest of the row

• Coupon — the fixed annual rate set at issue; it never changes.
• Maturity — when the face value is repaid. Longer-dated bonds usually (not always) carry higher yields.
• Daily change — how the price has moved on the day. When the market is closed it reads 0.0000 because nothing has traded since the last close.
• Price date/time — when the shown values were last updated by the pricing engine.

Information only. This guide explains how yields work; it is general educational material, not investment, financial, legal or tax advice, and not a recommendation to buy or sell any security. Figures shown are indicative, model-derived values.