U.S. Treasury Bond Futures and Options
T-Bonds / T-Notes Market

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U.S. Treasury bond futures and Treasury note futures have grown to become fundamental risk management tools for investors around the world. Managing interest rate risk is a very necessary component of most investors long term investment portfolio strategies. Real estate investors, fixed income investors, stock investors, currency investors and a multitude of other investor types are all influenced by short, medium and long term interest rates. All of these investors can effectively manage their interest rate risk by using treasury note futures and treasury bond futures contracts and options.

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In today's ever-changing global economy, holding fixed-income securities is tantamount to speculating on the futures direction of interest rates. With the Treasury Bond futures and Treasury Note futures contracts at the Chicago Board of Trade and the Mid America Commodity Exchange, institutional and individual investors can help control the interest rate risk in holding fixed-income securities and help optimize the performance of those interest rate sensitive investments.

Many savvy investors with bond portfolio's hedge their interest rate risk using treasury note futures and treasury bond futures. Whether market predictions call for rising or falling rates, you'll find that U.S. Treasury Bond (T bond) and (T Note) futures and options are an effective, low-cost way to help you meet your individual objectives. Learn More >>>

Meeting the Needs of a Changing Marketplace

Interest rate futures were pioneered by the Chicago Board of Trade (CBOT) in 1975 in response to a growing market need for tools that could protect against sharp and frequent swings in the cost of money.

U.S. Treasury bond futures were first introduced, followed by futures on 10-year, 5-year, and 2-year U.S. Treasury notes. Over the past two decades, contract volume has grown to unprecedented levels, reflecting the growth of the underlying instruments and profound changes in the interest rate futures marketplace.

Today, CBOT Treasury futures are the most actively traded interest rate future contracts in the world. Bond future trading has become a popular way to hedge interest rate risks in fixed income portfolios.

The CBOT offers futures on 2-year, 5-year, and 10-year U.S. Treasury notes and 30-year U.S. treasury bonds. Whether you're seeking to manage short, medium, or long-term risk, there is a contract that meets your needs. Some of the benefits of using interest rate futures are:

Efficiency

The unparalleled liquidity of CBOT Treasury bond, bill and note futures enables you to enter and exit positions quickly and easily - and receive the best fills on your order.

Market Integrity

Counterparty credit risk is a major concern in today's marketplace. Trading at the CBOT is structured to protect all parties involved from that risk. Our own professional audit staff oversees the trading at the exchange. The Board of Trade Clearing Corporation provides a performance guarantee. And the Commodity Futures Trading Commission, whose primary function is to protect the integrity of the markets and its participants, regulates all U.S. futures markets. With these safeguards, counterparty credit risk is no longer an issue.

Pricing

The prices of Treasury bond and note futures contracts are determined by open outcry in the designated trading pits, enabling you to receive the best prices available. These prices are global interest rate barometers, reflecting moves in national and international rates, and are available to the public immediately.

Trading Versatility

Because of CBOT Treasury bond and note futures respond to the same economic forces that affect cash fixed-income securities, you can use them to help control the risk of holding these securities as well as to improve returns.

How Treasury Futures Can Work for You

U.S. Treasury bond and note futures are the ideal tools to help you adjust the risk/return characteristics of your fixed income securities. Here are some of the many risk-management opportunities they offer.

Lock in a Purchase Price

If you plan to purchase fixed-income securities in the futures and are concerned about the possibility of higher prices, you can buy Treasury bond, bill and note futures and secure a maximum purchase price for your security.

Preserve Investment Value

By selling Treasury futures, you can lock in an attractive selling price and protect the value of a portfolio or individual security against possible decreasing prices caused by higher interest rates.

Cross-Hedge

U.S. Treasury bond and note futures can be used to control risk and enhance the returns of non-U.S. government securities. Treasury futures can be effective risk-management tools for corporate bonds, Eurobonds, and other fixed-income instruments.

Trade Changes in the Yield Curve

Because Treasury bond, bill and note futures cover a wide spectrum of maturities from short-term notes to long-term bonds, you can construct trades based on the differences in interest rate movements all along the yield curve.

Contract Specifications Treasury Bond and Note Futures

Trading Unit

Treasury bond Futures - One U.S. Treasury bond with $100,000 face value at maturity.

10-year Treasury note Futures - One U.S. Treasury note with $100,000 face value at maturity.

5-year Treasury note Futures - One U.S. Treasury note with $100,000 face value at maturity.

2-year Treasury note Futures - One U.S. Treasury note with $200,000 face value at maturity.

Deliverable Grades

T-bond Futures - Bonds with at least 15 years remaining to maturity.

10-year Treasury note Futures - Notes with 6 1/2 to 10 years remaining to maturity.

5-year Treasury note Futures - Notes with 4 years 3 months to 5 years 3 months remaining to maturity.

2-year Treasury note Futures - Notes with 1 year 9 months to 2 years remaining to maturity.

Tick Size

T-bond Futures - 1/32

10-year Treasury note Futures - 1/32

5-year Treasury note Futures - 1/2 of 1/32

2-year Treasury note Futures - 1/4 of 1/32

Price Limit

Treasury bond Futures - 3 points, expandable to 4 1/2 points.

10-year Treasury note Futures - 3 points, expandable to 4 1/2 points.

5-year Treasury note Futures - 3 points, expandable to 4 1/2 points.

2-year Treasury note Futures - 1 point, expandable to 1 1/2 points.

Contract Months

Treasury bond Futures - March, June, September, December

10-year Treasury note Futures - March, June, September, December

5-year Treasury note Futures - March, June, September, December

2-year Treasury note Futures - March, June, September, December

Trading Hours

Treasury bond Futures - 7:20a.m. -2:00p.m., 2:30-4:30p.m., 5:20p.m.-8:05p.m., 10:30p.m.-6:00a.m.

10-yearTreasury note Futures -7:20a.m. -2:00p.m., 2:30-4:30p.m., 5:20p.m. -8:05p.m., 10:30p.m. -6:00a.m.

5-year Treasury note Futures - 7:20a.m. -2:00p.m., 2:30-4:30p.m., 5:20p.m. -8:05p.m., 10:30p.m. -6:00a.m.

2-year Treasury note Futures -7:20a.m. -2:00p.m., 2:30-4:30p.m., 5:20p.m. -8:05p.m., 10:30p.m. -6:00a.m.

Ticker Symbol

Treasury bond Futures - US

10-year Treasury note Futures - TY

5-year Treasury note Futures - FV

2-year Treasury note Futures - TU

Last Trading Day

Treasury bond Futures -Seventh business day proceeding the last business day of the delivery month.

10-year Treasury note Futures -Seventh business day proceeding the last business day of the delivery month

5-year Treasury note Futures -Seventh business day proceeding the last business day of the delivery month.

2-year Treasury note Futures -The earlier of (1) the second business day prior to the issue day of the 2-year note auctioned in the current month, or (2) the last business day of the calendar month.

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U.S. Treasury Bond Futures and Options T-Bonds / T-Notes Market