How are corporate bonds typically quoted?

Corporate bonds are typically quoted in 1/8 increments. This means that the price of a corporate bond can be expressed in terms of a dollar amount per $100 of par value in increments of an eighth. For example, a corporate bond might be quoted at 98 1/8, meaning it is priced at $98.125 per $100 par value.

This quoting method is standard in the bond market to allow for precision when determining prices, particularly for bonds that have a lower interest rate environment or are trading close to par value. The use of eighths allows for a more detailed pricing scale, which can be important given the diversity and variability in corporate bond yields and terms.

In contrast, other securities such as equities are often quoted in increments of 1/4 or 1/32, and government bonds might be quoted differently as well. Understanding these conventions is essential for navigating the securities markets effectively.