how are bonds traded?
I tried looking for answers but I could not get a clear answer, so I am hoping someone will provide me one here.
- For 10 year treasury note, if I were to buy x amount today at yield of 2.60%, does that mean purchased x amount will mature in 10 years starting today?
- if it is maturing in 10 years, how is the yield for 10 year treasury note continuously quoted in Bloomberg?
- how is the price of 10 year treasury note quoted?
- how is it different from 10 year treasury note futures price?
- if I buy 1 contract of 10 year treasury note (September 2013) futures and hold onto it until maturity, what exactly do I get? Do I get 10 year treasury note maturing in 10 years starting at the delivery date of the futures contract?
Thank you so much for helping me!
You will buy the most current 10 year note, which was issue in April and re-opened June 13 if I am not mistaken.
Bloomberg quotes the most current 10 year note...the US Treasury issues new 10 year notes a few times a year.
From Wikipedia: T-Notes and T-Bonds are quoted on the secondary market at percentage of par in thirty-seconds of a point (n/32 of a point, where n = 1,2,3,...). Thus, for example, a quote of 95:07 on a note indicates that it is trading at a discount: $952.19 (i.e., 95 + 7/32%) for a $1,000 bond. (Several different notations may be used for bond price quotes. The example of 95 and 7/32 points may be written as 95:07, or 95-07, or 95'07, or decimalized as 95.21875.) Other notation includes a +, which indicates 1/64 points and a third digit may be specified to represent 1/256 points. Examples include 95:07+ which equates to (95 + 7/32 + 1/64) and 95:073 which equates to (95 + 7/32 + 3/256). Notation such as 95:073+ is not typically used.
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