Pull to Par
The tendency for bond prices to converge toward par value as maturity approaches.
Pull to par is the phenomenon where bond prices gradually move toward face value (100) as maturity nears, assuming no default. A premium bond (price >100) declines toward par over time; a discount bond (price <100) appreciates toward par. This happens because at maturity, all bonds redeem at exactly par — the present value of future cash flows (which includes par repayment) converges to par as time passes. For example, a bond bought at 105 will decline to 100 by maturity, while a bond bought at 95 will rise to 100. Pull to par is a key component of horizon return (roll-down effect). The rate of pull depends on time to maturity and coupon structure — zero-coupon bonds exhibit pure pull to par with no coupon cushion.
Current Yield
Annual coupon income divided by the bond's clean price.
Running Yield
Annual coupon income divided by the bond's dirty price (clean price plus accrued interest).
Yield to Maturity (YTM)
The annualized return if you hold the bond to maturity, assuming all coupons are reinvested at the same rate.
Dirty Price
The total settlement price paid for a bond, including accrued interest.
Clean Price
The quoted bond price excluding accrued interest.
Accrued Interest
Interest that has accumulated since the last coupon payment, paid by the buyer to the seller.