What is the difference between the Base Price of Security and the Face Value of Security?

closed as unclear what you're asking by base64, Dheer, Brythan, JoeTaxpayer Jan 23 '17 at 0:07

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  • 1
    This might be clearer with an example. Are you reading this in an application? Perhaps give an example security that has a different base price and face value. – Brythan Jan 22 '17 at 13:42
  • I have only heard of Par Value of a stock. – base64 Jan 22 '17 at 14:06
  • Par Value of Stock and Face Value of Stock are same. – Rohan Byanjankar Jan 22 '17 at 14:11

The base price is the one you paid when you initiated the position.

Face value is the value stated by the issuer. Although it may apply to stocks, it's most relevant for bonds. It the latter's case, it's the value you will get at maturity when they are redeemed.

Here's an example

Buying 10 2years zero interest bonds @950$ with 100$ of fees with a face value of 1000$
Base price of position : 9500$  (950$ x 10)
Cost basis of position : 9600$  (9500$+100$)
Face value of position : 10000$ (1000$ x 10)

YTM of bond :     2.60%
YTM of position : 2.06%

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