Treasury Price Quoting in 32nds
US Treasury bonds are quoted in fractions of 1/32 of a point rather than in decimal cents, a holdover convention every fixed-income desk still has to translate.
Most bonds and stocks are quoted in decimals — $99.75 — but US Treasury notes and bonds are still quoted in points and fractions of a 32nd of a point, a convention inherited from when prices were handwritten and 32nds were the finest fraction a trader needed. A price like "99-16" means 99 and 16/32 points, i.e. $99.50 per $100 of face value. A "+" after the fraction adds another half-32nd (a 64th): "99-16+" is 99 and 16.5/32, or $99.515625. Reading these quotes fast — knowing on sight that 16/32 is exactly a half point and 8/32 is a quarter point — is a basic fluency test on a rates desk.
For example, a quote of "101-08" converts to 101 + 8/32 = 101.25, so a $1 million face position is worth $1,012,500. The same bond quoted electronically for a retail system would simply show 101.25.
Treasury prices are quoted as points and 32nds (with an optional "+" for a half-32nd), so "99-16" means 99.50 and "101-08+" means 101 + 8.5/32 = 101.265625 — always convert to decimal before doing arithmetic on the price.
Practice in interviews
Further reading
- TreasuryDirect, Understanding Treasury Price Quotes