bid-to-cover ratio

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Bid-to-cover ratio

The ratio of the number of bids received in a Treasury security auction compared to the number of accepted bids.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Bid-to-Cover Ratio

In the auction of U.S. Treasury securities, the ratio of the bids received in the auction to the number of bids actually accepted. The bid-to-cover ratio is an indicator (though not the only one) of relative demand for Treasury securities. A bid-to-cover ratio of over 2.0 indicates a successful auction with competitive bidding, while a lower ratio indicates the opposite.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

bid-to-cover ratio

At an auction of Treasury securities, the dollar amount of money being bid compared with the dollar amount of securities being auctioned. A high ratio indicates strong demand and is likely to strengthen the market prices of other fixed-income securities.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
'We saw demand at the long end considering that we had a decent noncompetitive bid, and the bid-to-cover ratio is 1.4 times, so it's a good turnout actually,' Sta.
The participants showed high interest in the auction and the subscription totaled BGN 197.50 million, the bid-to-cover ratio being 1.98.
Before the Federal Reserve began its unprecedented stimulus in 2008, the bid-to-cover ratio never topped 2.65.
The bid-to-cover ratio for the benchmark bond was lower at 3.5x at the auction and 2x at the non-competitive sales, respectively.
Demand was 1.5 times the offer, down from the bid-to-cover ratio of 1.67 at the October 2012 sale of the similar bond.
Demand was lower than the previous auction, with the bid-to-cover ratio at 2.4 compared to 3.2 a month earlier.
Bid to cover spreads remained healthy, with Spain's 4.25 percent 4.5-year bonds bid-to-cover spread at 2.56, a 5.85 percent 10-year bonds bid-to-cover at 3.29 and a 3.30 percent 2.5-year bonds bid-to-cover at 4.26.
Of the bids for the latest issue, the ministry accepted 1.70 trillion yen worth, with the bid-to-cover ratio standing at 2.36, down from 2.39 for the November issue.
The so-called bid-to-cover ratio is believed to be a record high, although the ministry has no comparable data, according to financial market participants.
The bid-to-cover ratios have remained broadly unchanged, indicating there could be room for further adjustments in the auction sizes for future auctions,' Tetangco said.
The subscription totaled BGN 115,25 million, the bid-to-cover ratio being 2,31.
The bid-to-cover ratio came in at a relatively high 3.3x at the auction and the average yield was below the expected 6.43%.