Stock Market Glossary

Clean price

Price of a bond without accrued interest.

In brief: Price of a bond without accrued interest.

Meaning in practice

Bonds are quoted at the “clean” price; when purchased, the prorated interest since the last interest payment is calculated separately. Anyone who does not make this distinction is comparing apples with oranges.

Context for investors and traders

For investors, the term becomes practical in the context of objectives, time horizon, risk capacity and costs. A suitable solution can differ between two people even when they consider the same product or metric.

How to use this in practice

Use the term first to describe the situation and add verifiable data: time frame, benchmark, costs and liquidity. Only then does it become an assessment that can be connected to an investment objective and risk budget.

What to keep in mind

Avoid false precision. Many market terms describe probabilities or historical patterns; they neither guarantee a return nor replace the review of a specific security.

What does Clean price mean in simple terms?

Price of a bond without accrued interest.

When is this term relevant to investors?

Check how the term affects portfolio weights, ongoing costs or total risk. Clear target allocations and regular, non-reactive reviews can help.

What should I check before acting on Clean price?

Avoid false precision. Many market terms describe probabilities or historical patterns; they neither guarantee a return nor replace the review of a specific security.

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