Compared with treasury notes or treasury bonds, t-bonds take the longest time to mature. During the 20-30 years it takes for a t-bond to mature, t-bonds receive coupon payments every six months. The minimum denomination of a t-bond is $1,000 and they are typically sold through auction. The t-bond futures are usually used as risk management tools for investors who speculate on the futures direction of interest rates.
U.S. Treasury Bond Contract Specifications
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T-Bond Facts
Treasury bond futures represent a liquid market and many participate in its trade including bankers, bond dealers, hedgers and other financial service professionals. Participating in Treasury bond futures can allow one to hedge long term risk, address yield curves, and use a variety of trading strategies like spread trading and trading against different Treasury futures.
Ultra T-Bonds were conceived in order to help those who participate in the U.S. Treasury bond market to enhance one’s portfolio and help to manage risk. The difference between these futures in contrast to other T-Bond futures is that Ultra T-Bonds have a limited range of deliverable securities. Ultra T-Bonds also offer a sense of flexibility for traders looking for off balance and far dated sheet exposure within the marketplace.
Source: CME
Last updated May 2013.
