Dirty Price

The dirty price, also called the full price or invoice price, equals the clean price plus accrued interest since the last coupon payment.

For example, if a bond’s clean price is 98 per 100 of face value and accrued interest is about 0.83, the dirty price is about 98.83. On a bond with a face value of 10,000, the buyer would pay about 9,883.

The dirty price rises gradually between coupon payments as interest accrues, then falls by the amount of the coupon when it is paid. This is why bonds are usually quoted on a clean basis, with accrued interest added separately at settlement.

Mathematically, the dirty price equals the present value of all the bond’s remaining cash flows, discounted at its yield. Analysts calculate yields and durations using the dirty price, while traders quote clean prices. Both appear on trade confirmations.