InvestorQ : Can you tell me what are Clean Price and the Dirty Price in reference to trading in G-Secs?
Aashna Tripathi made post

Can you tell me what are Clean Price and the Dirty Price in reference to trading in G-Secs?

Answer
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Tisha Malhotra answered.
1 year ago


G-Secs are traded on a clean price (Trade price) but settled on the dirty price (Trade price + Accrued Interest). This happens, as the coupon payments are not discounted in the price, as is the case in the other non-govt. debt instruments. Accrued interest is when you sell between two interest paying dates and so you would have accrued so much of interest which will be built into the price at which you sell the bond.