Dirty Price (Full Price)
Definition
Dirty price (or full price) is the cash price you pay/receive for a bond at settlement. It includes accrued interest since the last coupon date.
Key Takeaways
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Dirty = Clean + Accrued Interest.
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This is the settlement amount (before fees).
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Use dirty for YTM calculations (it reflects actual cash exchanged).
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Dirty price jumps down by roughly the coupon amount on coupon payment dates (accrued resets).
Nigeria Example (illustrative)
Quoted clean = ₦1,025,000; accrued = ₦16,071 →
Dirty = ₦1,041,071 (that’s what changes hands at settlement).
Common Pitfalls
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Running YTM on clean instead of dirty price.
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Ignoring day-count rules when computing accrued.
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Comparing bonds with different coupon schedules without normalising.
Mini-FAQ
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Why is dirty higher than clean between coupons? Accrued interest builds daily.
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When do they become equal? Immediately after the coupon is paid.
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Are quotes dirty or clean? Market quotes are usually clean; settlement uses dirty.
Related Terms
Clean Price · Accrued Interest · Coupon · Yield to Maturity (YTM) · Duration
