Yield Basis

DEFINITION of 'Yield Basis'

A method of quoting the price of a fixed-income security as a yield percentage, rather than in dollars. This allows bonds with varying characteristics to be easily compared.


Unlike stocks, which are quoted in dollars, most bond quotes include a yield %. For example, Corp. ZZZ is listed with a 6.75% coupon, a Sept 04/20 maturity, has a dollar value of 94.00 and a yield of 9%.

This bond quote tells a bond trader that the bond is currently trading at a discount because its yield basis (9%) is greater than its coupon rate (6.75%). A bond trader could then compare the bond to others within a certain industry.