Yield to Put (YTP)
Yield assuming the bondholder exercises the put option at a specific put date and price.
YTP is the yield an investor would earn if they exercise the put option — selling the bond back to the issuer at a predetermined price (usually par) on a scheduled put date. Calculation is identical to YTC: Solve for the discount rate that equates the present value of cash flows up to the put date (plus the put price) to the market price. Puts protect the investor — if rates rise and bond prices fall, the holder can put the bond back at par. YTP is typically higher than YTM when the bond trades below par (the put is 'in the money'). Putable bonds trade at a premium to non-putable bonds because the embedded put option has positive value to the investor.
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.