Yield to Maturity (YTM)

Yield to maturity is the total annualized return a bond will deliver if held until it matures and all coupon payments are reinvested at the same rate, accounting for the bond's current price, coupon, face value, and time remaining. It is the single number bond investors use to compare bonds with different coupons, prices, and maturities on an apples-to-apples basis.

YTM moves opposite to price: a bond bought below face value has a YTM higher than its stated coupon, because the buyer also captures the gain of the price rising back to par at maturity, and vice versa for a bond bought above face value.