yield to maturity (YTM)
Doug is a Chartered Alternative Investment Analyst who spent more than 20 years as a derivatives market maker and asset manager before “reincarnating” as a financial media professional a decade ago.
Before joining Britannica, Doug spent nearly six years managing content marketing projects for a dozen clients, including The Ticker Tape, TD Ameritrade’s market news and financial education site for retail investors. He has been a CAIA charter holder since 2006, and also held a Series 3 license during his years as a derivatives specialist.
Doug previously served as Regional Director for the Chicago region of PRMIA, the Professional Risk Managers’ International Association, and he also served as editor of Intelligent Risk, PRMIA’s quarterly member newsletter. He holds a BS from the University of Illinois at Urbana-Champaign and an MBA from Illinois Institute of Technology, Stuart School of Business.
Jennifer Agee has been editing financial education since 2001, including publications focused on technical analysis, stock and options trading, investing, and personal finance.
If you buy a bond, “yield to maturity” is the estimate of how much you’ll make by the time the bond matures, including coupon payments and any increase in the price of the bond versus the purchase price over time. To determine yield to maturity, you need to know the face value of the bond, the price of the bond, the annual coupon rate (yield), and the number of years to maturity. The yield to maturity is expressed as a percentage that may or may not differ from the coupon depending on whether the bond was purchased at a discount to face value.