Gyroscopic Investing

Why are treasuries priced in $100 increments i.e. 99.730 but sold in $1000 increments? Seems like a bond in this example would be priced at $997.30. I'm sure there is a simple, obvious reason.

Lonestar wrote: ↑Thu Feb 23, 2023 10:42 am Why are treasuries priced in $100 increments i.e. 99.730 but sold in $1000 increments? Seems like a bond in this example would be priced at $997.30. I'm sure there is a simple, obvious reason.

Per Investopedia at https://www.investopedia.com/terms/b/bondquote.asp
"A bond quote is the last price at which a bond traded, expressed as a percentage of par value and converted to a point scale. Par value is generally set at 100, representing 100% of a bond's face value of $1,000. For example, if a corporate bond is quoted at 99, that means it is trading at 99% of face value. In this case, the cost to buy each bond is $990."

Note, while Treasurys are sold in $1000 increments at brokers, you can actually buy as little as $100 in $100 increments via TreasuryDirect. Of course then you cannot sell unless you first transfer to a broker. So probably best to avoid unless absolutely positive will hold to maturity - maybe OK for short durations like T-Bills. See https://www.treasurydirect.gov/marketab ... ury-bills/

OK, thanks, makes sense. I have no idea why they do it that way, considering the percent and dollar amounts really equate to the same, but I'm sure there is a good reason. I've never used Treasury Direct and was not aware they would sell in $100 increments. Brokerages sell secondary market and auction in 1K increments only as far as I know.

Lonestar wrote: ↑Fri Feb 24, 2023 11:24 am OK, thanks, makes sense. I have no idea why they do it that way, considering the percent and dollar amounts really equate to the same, but I'm sure there is a good reason. I've never used Treasury Direct and was not aware they would sell in $100 increments. Brokerages sell secondary market and auction in 1K increments only as far as I know.

It wasn't that long ago you had to buy in $10,000 increments at most brokerages.

And fractions (32nds!) instead of decimals.

Would even declinests agree that this is one area of the world where things have improved?