Treasury Futures Contract

Treasury Futures Contract

A futures contract in which one agrees to buy a U.S. Treasury security at a certain price at some stated date in the future, regardless of what the spot price is on that date. One buys a Treasury future if one expects Treasury securities to rise in price (because one wants to lock in the lower price). For the same reason, one sells a Treasury future if one expects the price to fall. Treasure futures are traded on the CBOT.
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The seller of a CBOT Treasury futures contract agrees to deliver a Treasury security to the purchaser of the contract at a specified price at a future date.
The Board of Trade, for example, says its Treasury futures contract has risen 54 percent in the past five years, while the over-the-counter market has grown fivefold.

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