• user warning: Table './mysmp_drupal/cache_filter' is marked as crashed and should be repaired query: SELECT data, created, headers, expire, serialized FROM cache_filter WHERE cid = '1:280e5f0d1774895b58fefdac23f22422' in /var/www/html/mysmp/includes/cache.inc on line 26.
  • user warning: Table './mysmp_drupal/cache_filter' is marked as crashed and should be repaired query: UPDATE cache_filter SET data = '<h1>Treasury Bills</h1>', created = 1526900681, expire = 1526987081, headers = '', serialized = 0 WHERE cid = '1:280e5f0d1774895b58fefdac23f22422' in /var/www/html/mysmp/includes/cache.inc on line 109.
  • user warning: Table './mysmp_drupal/cache_filter' is marked as crashed and should be repaired query: SELECT data, created, headers, expire, serialized FROM cache_filter WHERE cid = '1:ecdeefb4e31ba218db014973de3c21ac' in /var/www/html/mysmp/includes/cache.inc on line 26.
  • user warning: Table './mysmp_drupal/cache_filter' is marked as crashed and should be repaired query: UPDATE cache_filter SET data = '<h2>What are Treasury Bills (T-Bills)?</h2><br /><b class=\"normalize\">Treasury Bills</b>, or more commonly known as <b class=\"normalize\">T-Bills</b>, are short term government debt instruments, issued at a discount to par and mature within 1 year.&nbsp; The largest purchase volumes come from primary dealers and other large banking or financial institutions.<br /><br />T-Bill issuance is a form open market operations employed by the <a href=\"/bonds/federal-reserve-bank.html\" title=\"federal reserve bank\">Federal Reserve</a> to control the <a href=\"/world-markets/money-supply.html\" title=\"money supply\">money supply</a>.&nbsp; Large T-Bill issuances are seen as a means to reduce the money supply, thereby reducing liquidity to control <a href=\"/bonds/inflation.html\" title=\"inflation\">inflation</a>.&nbsp; When the treasury buys T-Bills back, their aim is to increase the money supply and decrease interest rates.<br /><br />Similar to <a href=\"/bonds/discount-notes.html\" title=\"discount notes\">discount notes</a> and <a href=\"/bonds/zero-coupon-bonds.html\" title=\"zero coupon bonds\">zero-coupon bonds</a>, t-bills do not make periodic interest payments and mature at par.&nbsp; The interest component&nbsp;on the security is paid at <a href=\"/bonds/maturity-date.html\" title=\"maturity date\">maturity</a>, equaling the <a href=\"/bonds/par-value.html\" title=\"par value\">par value </a>of the bond minus the purchase price.&nbsp; For example, if you purchased a bond with a par value of $100 at $95, you would receive $5 of interest.<br /><br />Additionally, interest income derived from treasury bills is exempt from state &amp; local taxes but is subject to federal taxes.<br /><br /><h2>T-Bill Yield Calculation</h2><br />To calculate the yield of treasury bills, you can use the following formula:<br /><br /><img src=\"/files/u1/t-bill-yield-calc.png\" alt=\"T-Bill Yield Calculation\" style=\"width: 367px; height: 102px;\" /><br />&nbsp; <br /><h2>When are T-Bills Sold?</h2><p>Treasury bills are auctioned off weekly with maturities of 4 weeks (1 Month), 13 weeks (3 Months), 26 weeks (6 Months), and 52 weeks (1 year).&nbsp; These standard maturities are commonly referred to <b class=\"normalize\">benchmark bills</b>.&nbsp; Since there is an auction every week for each of these maturities, the most recently issued security for each specific maturity is known as the <a href=\"/bonds/on-the-run-treasury-security.html\"><strong>on the run security</strong></a>.&nbsp; All previously issued maturities are known as <strong>off the run securities</strong>.<br /><br />Benchmark bill auctions can be accessed through the TreasuryDirect website and require a minimum bid of $100.&nbsp; The auction is a&nbsp;single&nbsp;price dutch auction which will guarantee a price equal to the lowest bid that will fill the supply being offered.&nbsp; To prevent a large buyer from winning the entire offering, there is a 35% maximum allotment to any one single buyer.</p><h2>Treasury Re-openings</h2><p>For some types of the securities, the treasury will re-open previously issued securities which will have the maturity date, security <a href=\"/bonds/cusip.html\" title=\"cusip\">CUSIP</a>, and coupon interest rate as the originally issued security.&nbsp; The one thing to keep in mind however is that the price that you will pay for the re-opened will most likely be different than the price of the original issuance since interest rates may have moved in the market.<br /><br />Currently, the treasury is only offering re-openings on <a href=\"/bonds/10-year-treasury-note.html\" title=\"10 year treasury notes\">10 year treasury notes</a>, 5yr TIPS, 10yr TIPS, 30 yr TIPS, and the 30 year treasury bond.&nbsp; Visit the following link to more details the exact dates of the re-openings.&nbsp; <br /><br /><a href=\"http://www.treasurydirect.gov/instit/auctfund/work/reopenings/reopenings.htm\">Treasury Re-Opening Schedule</a></p><h2>Cash Management Bills</h2><p>The treasury also issues <b class=\"normalize\">cash management bills</b> (CMB)&nbsp;which have non-standard maturities.&nbsp; They are issued to meet temporary short term funding needs of the treasury and have maturities that range from a few days out, up to a couple months.&nbsp; Yields on CMB\'s are higher than the typical T-Bill issuance due to the fact that there are not as many buyers for these securities.</p><hr /> <strong>Types of Treasury Securities</strong>:<br />&lt;&lt; <a title=\"treasury bonds\" href=\"/bonds/treasury-bonds.html\">Treasury Bonds</a><br /><a href=\"/bonds/treasury-notes.html\" title=\"treasury notes\">Treasury Notes</a> &gt;&gt;<br /><a href=\"/bonds/treasury-inflation-protected-securities.html\" title=\"treasury TIPS\">Treasury TIPS</a> &gt;&gt;<br /><a href=\"/bonds/treasury-strips.html\" title=\"treasury strips\">Treasury STRIPS</a> &gt;&gt;<br />', created = 1526900681, expire = 1526987081, headers = '', serialized = 0 WHERE cid = '1:ecdeefb4e31ba218db014973de3c21ac' in /var/www/html/mysmp/includes/cache.inc on line 109.
  • user warning: Table './mysmp_drupal/cache_filter' is marked as crashed and should be repaired query: SELECT data, created, headers, expire, serialized FROM cache_filter WHERE cid = '1:2fda152348bc4ae73408bf0b82608e9a' in /var/www/html/mysmp/includes/cache.inc on line 26.
  • user warning: Table './mysmp_drupal/cache_filter' is marked as crashed and should be repaired query: UPDATE cache_filter SET data = '<p>Tim Ord is a technical analyst and expert in the theories of chart analysis using price, volume, and a host of proprietary indicators as a guide to navigating through the markets.</p><p>Tim is in the Timers Digest Top 10 Rankings for his newsletter and is the Author of \"The Secret Science of Price and Volume”. Ord also contributes to the Stocks &amp; Commodities Magazine.</p>', created = 1526900681, expire = 1526987081, headers = '', serialized = 0 WHERE cid = '1:2fda152348bc4ae73408bf0b82608e9a' in /var/www/html/mysmp/includes/cache.inc on line 109.
  • user warning: Table './mysmp_drupal/cache_filter' is marked as crashed and should be repaired query: SELECT data, created, headers, expire, serialized FROM cache_filter WHERE cid = '1:4dd69529abed14a5c1c8f3ba7e22f8eb' in /var/www/html/mysmp/includes/cache.inc on line 26.
  • user warning: Table './mysmp_drupal/cache_filter' is marked as crashed and should be repaired query: UPDATE cache_filter SET data = '<p>Tradingsim.com provides the ability to simulate day trading 24 hours a day from anywhere in the world. TradingSim provides tick by tick data for every symbol on the Nasdaq, NYSE, and AMEX.</p><p>Use the fast forward and pause features to analyze your trading decisions with more precision.</p>', created = 1526900681, expire = 1526987081, headers = '', serialized = 0 WHERE cid = '1:4dd69529abed14a5c1c8f3ba7e22f8eb' in /var/www/html/mysmp/includes/cache.inc on line 109.
  • user warning: Table './mysmp_drupal/cache_filter' is marked as crashed and should be repaired query: SELECT data, created, headers, expire, serialized FROM cache_filter WHERE cid = '1:151e49b034b3ac8a98c1331980da8b69' in /var/www/html/mysmp/includes/cache.inc on line 26.
  • user warning: Table './mysmp_drupal/cache_filter' is marked as crashed and should be repaired query: UPDATE cache_filter SET data = '<h2>Related Videos</h2>', created = 1526900681, expire = 1526987081, headers = '', serialized = 0 WHERE cid = '1:151e49b034b3ac8a98c1331980da8b69' in /var/www/html/mysmp/includes/cache.inc on line 109.
  • user warning: Table './mysmp_drupal/cache_filter' is marked as crashed and should be repaired query: SELECT data, created, headers, expire, serialized FROM cache_filter WHERE cid = '1:e6ff5fe7efa34d641d697991ec512c61' in /var/www/html/mysmp/includes/cache.inc on line 26.
  • user warning: Table './mysmp_drupal/cache_filter' is marked as crashed and should be repaired query: UPDATE cache_filter SET data = '<h2>Related Articles</h2>', created = 1526900681, expire = 1526987081, headers = '', serialized = 0 WHERE cid = '1:e6ff5fe7efa34d641d697991ec512c61' in /var/www/html/mysmp/includes/cache.inc on line 109.
  • user warning: Table './mysmp_drupal/cache_filter' is marked as crashed and should be repaired query: SELECT data, created, headers, expire, serialized FROM cache_filter WHERE cid = '4:64dc950e564b7bb494892459d2858add' in /var/www/html/mysmp/includes/cache.inc on line 26.
  • user warning: Table './mysmp_drupal/cache_filter' is marked as crashed and should be repaired query: UPDATE cache_filter SET data = '<div class=\"left\">\n <p>copyright &copy; 2011 MYSMP.com. All rights reserved.</p>\n <a href=\"/\">Home</a> • <a href=\"/advertise\">Advertise</a> • <a href=\"/sitemap\">Sitemap</a> • <a href=\"/privacy-policy\">Privacy Policy</a>\n</div>\n\n<div class=\"right\">\n <p>Designed &amp; Developed by: bxCreative.com: <a target=\"_blank\" href=\"http://bxcreative.com\">Web design</a></p>\n</div>', created = 1526900681, expire = 1526987081, headers = '', serialized = 0 WHERE cid = '4:64dc950e564b7bb494892459d2858add' in /var/www/html/mysmp/includes/cache.inc on line 109.
  • user warning: Table './mysmp_drupal/cache_filter' is marked as crashed and should be repaired query: SELECT data, created, headers, expire, serialized FROM cache_filter WHERE cid = '1:ef414e50ef3bcd60831c79a8ccac7f37' in /var/www/html/mysmp/includes/cache.inc on line 26.
  • user warning: Table './mysmp_drupal/cache_filter' is marked as crashed and should be repaired query: UPDATE cache_filter SET data = '<h2 class=\"pane-title\"><a href=\"/investment-articles\">Investment Articles</a></h2><h2 class=\"pane-title\"><a href=\"/premium-services\">Premium Services</a></h2> <h2 class=\"pane-title\"><a href=\"/free-offers\">Free Offers</a></h2> <h2 class=\"pane-title\"><a href=\"/video\">Videos</a></h2>', created = 1526900681, expire = 1526987081, headers = '', serialized = 0 WHERE cid = '1:ef414e50ef3bcd60831c79a8ccac7f37' in /var/www/html/mysmp/includes/cache.inc on line 109.
  • user warning: Table './mysmp_drupal/cache_filter' is marked as crashed and should be repaired query: SELECT data, created, headers, expire, serialized FROM cache_filter WHERE cid = '1:7ab206dca588aa9858fab14b55f27503' in /var/www/html/mysmp/includes/cache.inc on line 26.
  • user warning: Table './mysmp_drupal/cache_filter' is marked as crashed and should be repaired query: UPDATE cache_filter SET data = '<p>16192 Coastal Highway<br />\nLewes, Delaware 19958</p>\n', created = 1526900681, expire = 1526987081, headers = '', serialized = 0 WHERE cid = '1:7ab206dca588aa9858fab14b55f27503' in /var/www/html/mysmp/includes/cache.inc on line 109.
  • user warning: Table './mysmp_drupal/cache_filter' is marked as crashed and should be repaired query: SELECT data, created, headers, expire, serialized FROM cache_filter WHERE cid = '1:fb9bc3d8197c3f70b5a896cc8bae29d6' in /var/www/html/mysmp/includes/cache.inc on line 26.
  • user warning: Table './mysmp_drupal/cache_filter' is marked as crashed and should be repaired query: UPDATE cache_filter SET data = '<a href=\"/\"><img src=\"/sites/all/themes/bx/images/logo.png\" /></a>', created = 1526900681, expire = 1526987081, headers = '', serialized = 0 WHERE cid = '1:fb9bc3d8197c3f70b5a896cc8bae29d6' in /var/www/html/mysmp/includes/cache.inc on line 109.

Treasury Bills

What are Treasury Bills (T-Bills)?


Treasury Bills, or more commonly known as T-Bills, are short term government debt instruments, issued at a discount to par and mature within 1 year.  The largest purchase volumes come from primary dealers and other large banking or financial institutions.

T-Bill issuance is a form open market operations employed by the Federal Reserve to control the money supply.  Large T-Bill issuances are seen as a means to reduce the money supply, thereby reducing liquidity to control inflation.  When the treasury buys T-Bills back, their aim is to increase the money supply and decrease interest rates.

Similar to discount notes and zero-coupon bonds, t-bills do not make periodic interest payments and mature at par.  The interest component on the security is paid at maturity, equaling the par value of the bond minus the purchase price.  For example, if you purchased a bond with a par value of $100 at $95, you would receive $5 of interest.

Additionally, interest income derived from treasury bills is exempt from state & local taxes but is subject to federal taxes.

T-Bill Yield Calculation


To calculate the yield of treasury bills, you can use the following formula:

T-Bill Yield Calculation
 

When are T-Bills Sold?

Treasury bills are auctioned off weekly with maturities of 4 weeks (1 Month), 13 weeks (3 Months), 26 weeks (6 Months), and 52 weeks (1 year).  These standard maturities are commonly referred to benchmark bills.  Since there is an auction every week for each of these maturities, the most recently issued security for each specific maturity is known as the on the run security.  All previously issued maturities are known as off the run securities.

Benchmark bill auctions can be accessed through the TreasuryDirect website and require a minimum bid of $100.  The auction is a single price dutch auction which will guarantee a price equal to the lowest bid that will fill the supply being offered.  To prevent a large buyer from winning the entire offering, there is a 35% maximum allotment to any one single buyer.

Treasury Re-openings

For some types of the securities, the treasury will re-open previously issued securities which will have the maturity date, security CUSIP, and coupon interest rate as the originally issued security.  The one thing to keep in mind however is that the price that you will pay for the re-opened will most likely be different than the price of the original issuance since interest rates may have moved in the market.

Currently, the treasury is only offering re-openings on 10 year treasury notes, 5yr TIPS, 10yr TIPS, 30 yr TIPS, and the 30 year treasury bond.  Visit the following link to more details the exact dates of the re-openings. 

Treasury Re-Opening Schedule

Cash Management Bills

The treasury also issues cash management bills (CMB) which have non-standard maturities.  They are issued to meet temporary short term funding needs of the treasury and have maturities that range from a few days out, up to a couple months.  Yields on CMB's are higher than the typical T-Bill issuance due to the fact that there are not as many buyers for these securities.


Types of Treasury Securities:
<< Treasury Bonds
Treasury Notes >>
Treasury TIPS >>
Treasury STRIPS >>
Tim Ord
Ord Oracle

Tim Ord is a technical analyst and expert in the theories of chart analysis using price, volume, and a host of proprietary indicators as a guide...

Tradingsim.com
Day Trading Simulator

Tradingsim.com provides the ability to simulate day trading 24 hours a day from anywhere in the world. TradingSim provides tick by tick data for...

Send this article to a friend.

Enter multiple addresses on separate lines or separate them with commas.