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basis price

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Financial Dictionary

Basis Price

Price quotation for a security expressed in terms of yield to maturity. This will usually only be quoted on fixed-income securities such as bonds.

Investopedia Commentary

For example, if a bond price was quoted as 10% and this was also the yield to maturity, then the 10% would be the basis price.

Related Links

Bond Basics Tutorial
Advanced Bond Concepts

See also: Bond, Fixed-Income Security, Maturity, Yield To Maturity - YTM

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Financial Dictionary

basis price

  1. The price of a security quoted in terms of its yield rather than its dollar price. Bonds are often quoted on a basis price reflecting yield to maturity since such information is of greatest importance to an investor deciding to buy or sell.

  2. The price selected by a specialist at which to execute an odd-lot order on an inactive stock. The large spread on inactive stocks often results in a basis price that splits the difference between the bid and ask.


Wall Street Words: An A to Z Guide to Investment Terms by David L. Scott.
Copyright © 2003. Published by Houghton Mifflin.
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