The cme croup will launch new Treasury note futures and options contracts to combat a gap in Treasury bond issuance from 2001 to 2006, when the US government suspended issuance of 30-year Treasuries in an effort to lower borrowing costs. The derivatives exchange will launch the Ultra 10-Year US Treasury Note contracts early in the first quarter of next year. The contracts will reference the cheapest-to-deliver Treasury security with maturities between nine years and five months and 10 years. The goal is to give traders more precise exposure to Treasury notes. The exchange's existing T-Note futures reference the cheapest in a basket of maturities from 6.5 years to 10 years - in the current environment the shortest-dated contract. Additionally, the US Treasury's decision to halt 30-year bond issuance 15 years ago has created a gap in available deliverables in the exchange's suite of Treasury futures contracts.
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