Bond markets have evolved over time in terms of how they quote prices and historically, different regions and types of bonds have used distinct quotation systems.

Let's go over these conventions and their evolution.

Historically, US treasury bonds were quoted in fractions, specifically in 30 seconds of a dollar.

To give you an example, imagine a US Treasury note with a quoted price of 100 dash seven.

This means the bond is trading at 107 30 seconds of its par value.

This can be easily translated into a decimal quote, divide seven by 32 and add the result to 100.

So a price of 107 30 seconds translates to 100.2188%.

If the bond's par value is a hundred thousand US dollars, then it's currently trading at just over $100,218.

This method of quoting was prevalent for decades.

However, there's been a gradual shift towards decimal pricing, which started in the early two thousands as part of a broader initiative to modernize and simplify bond trading.

Nowadays, auction results for treasuries are given in decimals, but certain market data and analytics platforms still maintain the fractional system and quote treasuries in 30 seconds.

Corporate and municipal bonds in the United States have also transitioned away from fractional pricing towards decimal pricing.

This shift aligns these markets with the broader trend in financial markets towards decimalization. Decimal pricing makes it easier for investors to compare prices and interpret bond values without needing to convert fractions in European and other international bond markets.

Decimal pricing has been the standard for many years.

This approach is in line with the metric system used widely in Europe and the global trend towards decimalization in financial markets.

Decimal pricing facilitates easier interpretation and comparison of bond prices, particularly for international investors.

For example, let's look at a Japanese government bond with a quoted price of 100.9290.

This means the bond is trading at 100.929% of its par value.

If the bond's par value is 100 million Japanese yen, then the current market price would be about 100,929,000 yen.

In emerging markets, the quoting Convention can vary depending on the country and bond type.

However many emerging markets have already adopted or are in the process of transitioning to decimal pricing.

This move aligns with international standards, making it easier for global investors to trade bonds and compare prices across different markets.