This is the loss that occurs when a bond is purchased at a higher price than the price at which it is eventually redeemed. In other words, if the investor pays more for the bond than the amount he gets back upon redemption, it results in a financial loss.

Compare: Redemption gain.

This term refers to a specific aspect of the financial world. To better understand this term, it is important to consider the context in which it is used, such as legal provisions, market conditions or specific business practices.