Nominal value

The amount written on the instrument itself, also called face value or par value. On a bond it is the principal repaid at maturity and the figure the coupon rate is applied to, so it governs two cash flows and is fixed for the life of the security. The market price moves around it and is quoted as a percentage of it, which is why a bond can change hands well above or well below a figure that has not moved at all.

Shares carry the word too, in a narrower sense. Company law in many jurisdictions requires each share to have a nominal value, and the total of those values is the company's issued share capital. It is an accounting and legal artefact rather than a price: it is typically a very small amount, it is set when the shares are created, and it bears no relationship to what the share is worth. Some jurisdictions permit shares with no nominal value at all.

Economists use nominal in a third sense, as the opposite of real. A nominal figure is stated in the money of the day; a real figure is the same quantity after the effect of inflation has been removed. Nominal wages, nominal growth and nominal interest rates all mean the unadjusted version, and the two can point in opposite directions when prices are rising quickly.

The tripwire is the near neighbour. Notional value is the full value of a derivative contract, price multiplied by the units it covers, and it moves with the price. Nominal value is a fixed figure printed on a security. Many desks use the two words interchangeably in conversation, which is a genuine ambiguity rather than a mistake one side is making, so context decides which is meant and documentation usually says which it means.