The mirror image of this site’s yield-to-call calculator — here the bondholder, not the issuer, holds the early redemption option.
How it works
The same approximation formula as yield to call applies, with the put price and put date replacing the call price and call date — reflecting the bondholder’s perspective on exercising their redemption right.
What this does not include
This is an approximation formula, not an exact yield calculation — a precise yield-to-put figure requires solving the bond’s price equation numerically, similar to how this site’s IRR calculator handles more complex cash flow timing.
How to use this calculator
- Enter the current bond price, put price, annual coupon, and years to the put date.
Frequently asked questions
Why would a bond include a put option for the holder?
It gives bondholders protection against rising rates or issuer credit deterioration — the ability to force early redemption makes the bond more attractive, often letting the issuer offer a slightly lower coupon.
When would a bondholder exercise a put option?
Typically when the bond is trading below the put price, or when reinvestment opportunities elsewhere look more attractive than continuing to hold the bond.
Does a putable bond trade differently than a plain bond?
Yes — the put option adds value to the bond for the holder, so a putable bond often trades at a premium (or carries a lower yield) compared to an otherwise identical plain bond.
