Bond Yield to Put (BYTP)

The term Yield to Put is often abbreviated as YTP. The calculation for Yield to Put is very similar to Yield to Maturity and equal to the Yield to Call calculation.

Difference Between Yield to Call and Yield to Put :

Yield to call, which is the yield of the bond up until the date the company calls the bond.

Yield to put, is the yield of the bond up until the date the bondholder puts the bonds back to the company.

Estimated Yield to Put Formula :

Approximate yield to put on a bond = (Annual interest rate) + ( (price to put - Current price) / (Years to put) ) / (Price to put + current price)/2

Exact Yield to Put Formula :

Price = Coupon Payment/(1+rate)^-1 + Coupon Payment/(1+rate)^-2 + ... + Coupon Payment/(1+rate)^-n + Price to Put/(1+rate)^-n

Note : A put bond can also be called a puttable bond or a retraction bond.