oh okay
so that extra amount is not gone? i get it back?
Yes, exactly.
On the next payout date, you’ll receive the full coupon. The portion you paid extra comes back as part of that payout.
So it’s just a timing adjustment, not a loss.
wait so if i buy right before the payout date
i’ll end up paying a lot of this extra amount?
Yes, but think about the other side too.
If you buy just before payout, you also receive the full coupon in a few days. So it balances out.
It only feels odd because the cash outflow happens before the inflow.
yeah first time it feels like something is off
but after one cycle you realise nothing is actually lost
Happens with everyone initially.
If you want to be precise, just check the settlement breakdown before investing. BondScanner usually shows clean price and accrued interest separately.
Once you’ve seen it once or twice, it becomes second nature.
got it
honestly i thought i got charged something extra
this makes way more sense now