Clean price

So let's imagine you have a toy that you want to sell. Now, you know that the toy is not brand spanking new and might have a little bit of scratches, but you still want to get the best price for it.

Now, the person who is going to buy your toy is going to look at it and consider the scratches and other signs of wear and tear. They are going to say "hey, this toy is not brand new, so I can't pay top dollar for it".

So when you and the buyer agree on a price, that is called the dirty price. It’s called dirty because it includes all of the wear and tear on the toy.

But then something really cool happens, you take the wear and tear out of the equation and sell the toy based on its actual value. This is called the clean price. It’s called clean because it’s stripped of all things negative like scratches and dirt.

So the clean price is basically the value of an asset without considering any of the negative effects. It's like selling your old toy to a buyer after removing all the scratches and dents. The clean price is usually used in financial markets to determine the exact value of bonds, stocks, and other financial instruments.