Treasury Bills, Notes, and Bonds Discussion

[JoeWras]

Interesting results.

13 wk is up 5bp from last week.
26 wk is down 6bp from last week.

Not a surprise given what happened on secondary. I still think the market overreacted to the CPI. Should be interesting to see what happens next.

 

[wdwwildbill]

Thank you all for holding my hand with figuring out how to buy these. Order went through today at Fidelity on what I ordered .. Thanks again !!!!

 

[Fermion]

At Fidelity right now the min purchase on the 13 and 26 weeks is $100,000

 

[wdwwildbill]

At Fidelity right now the min purchase on the 13 and 26 weeks is $100,000

LOL a little to much for me !!!

 

[Fermion]

LOL a little to much for me !!!

Yeah, I have one of my Roths there along with 401k money but the Roth only has $85k in it....tried to buy $40,000 of the 26 week but couldn't.

 

[audreyh1]

At Fidelity right now the min purchase on the 13 and 26 weeks is $100,000

That would be on the secondary market, not at auction.

Yeah, I have one of my Roths there along with 401k money but the Roth only has $85k in it....tried to buy $40,000 of the 26 week but couldn't.

When did you try?

You can buy the 13 and 26 week at auction next Monday. Order Thursday afternoon through the weekend. $1000 minimum, increments of $1000, no problem.

 

[swk7907]

At Fidelity right now the min purchase on the 13 and 26 weeks is $100,000

Are you referring to the secondary market? You can click on Depth of Book and see the other prices. The 3 month tbill can be bought for as little as $1,000 with only giving up 2/10 of a basis point vs. the best offer.

 

[jazz4cash]

At Fidelity right now the min purchase on the 13 and 26 weeks is $100,000

I don’t follow. Is that for auction orders or what? (I don’t see any available right now.) I see plenty available with minimum of $1k in the secondary market when you click Depth of Book icon.

EDIT: see swk’s post above.

 

[Fermion]

I don’t follow. Is that for auction orders or what? (I don’t see any available right now.) I see plenty available with minimum of $1k in the secondary market when you click Depth of Book icon.

EDIT: see swk’s post above.

I couldn't find them either when I clicked auctions, but when I used the CUSID number that was linked a few posts up, I found them both at Fidelity.

This: 912796W47

 

[CRLLS]

I don’t follow. Is that for auction orders or what? (I don’t see any available right now.) I see plenty available with minimum of $1k in the secondary market when you click Depth of Book icon.

EDIT: see swk’s post above.

If you are talking about auctions, that is because there are no 13 or 26 week T-bills offered at auction at this time. This week's auction is over early this morning. The next auction will not be announced until 11/17. That auction will be held on 11/21 with an issue date of 11/30.

 

[audreyh1]

I couldn't find them either when I clicked auctions, but when I used the CUSID number that was linked a few posts up, I found them both at Fidelity.

This: 912796W47

When you find them like that: the auction is over and you are now trying to buy them on the secondary market.

The auction process is quite different. You look for each new issue treasury at Fidelity after they are announced - usually listed by that afternoon under the new issues tab. So you want to be familiar with the auction announcement schedule as well as the auction schedule. Then you can place your order up until early morning before the auction.

 

[Fermion]

Right.

I have a question on the current 10 year TIPS auction that was announced Nov 10 and happens on Nov 17.

It says the coupon is 0.625 but the expected yield is 1.468%. Does this mean these TIPS will be auctioned off on Thursday at a discount to par, such that over 10 years you get 1.468% real return?

Since it says that is the expected yield..how will you know what the actual yield is before you buy....or is that the point of the auction, you don't know?

 

[audreyh1]

I’ll have to let a TIPS expert weigh in.

For regular Treasury notes and bonds they also pay a semiannual coupon as well as being auctioned at some (usually) discount to par.

The expected yield is a bit of a red herring. It’s a guess and often off a bit. Prior auction and secondary market bids for prior issue can give you a closer guess. I'm not sure what it means for TIPS.

 

[jazz4cash]

If you are talking about auctions, that is because there are no 13 or 26 week T-bills offered at auction at this time. This week's auction is over early this morning. The next auction will not be announced until 11/17. That auction will be held on 11/21 with an issue date of 11/30.

Yes I know but I couldn’t figure out Fermion’s post.

 

[Sunset]

Right.

I have a question on the current 10 year TIPS auction that was announced Nov 10 and happens on Nov 17.

It says the coupon is 0.625 but the expected yield is 1.468%. Does this mean these TIPS will be auctioned off on Thursday at a discount to par, such that over 10 years you get 1.468% real return?

Since it says that is the expected yield..how will you know what the actual yield is before you buy....or is that the point of the auction, you don't know?

I'm new to buying TIP's so the following is my knowledge to date.

You can put in an order for it now, because if you wait until the 17th, some brokerages don't let you order in the morning. I learned that and missed some bonds in the beginning.

I just bought 10K worth, just for fun, just now Monday night.

Nobody knows what the actual interest will be until the auction is over. Kinda a fun game for investing

Whatever the real return is, it will be that number multiplied by the inflation adjusted value of the bond and interest is paid every 6 months.

 

[daylatedollarshort]

Right.

I have a question on the current 10 year TIPS auction that was announced Nov 10 and happens on Nov 17.

It says the coupon is 0.625 but the expected yield is 1.468%. Does this mean these TIPS will be auctioned off on Thursday at a discount to par, such that over 10 years you get 1.468% real return?

Since it says that is the expected yield..how will you know what the actual yield is before you buy....or is that the point of the auction, you don't know?

Yes, they will be auctioned off at a discount to par. If you put in a non-competitive bid, you agree to accept the discount rate, yield, or discount margin determined at auction. You won't know exactly what the discount to par / real yield will be until the auction is over, but usually the results come in fairly close to the expected yields.

This site has a more detailed explanation and examples -Q&A on TIPS | Treasury Inflation-Protected Securities (tipswatch.com)

There are also ways to put in competitive bids, but I have never seen that as an option on my Fidelity TIPS order screen. I don't know if that is an option through other brokerages, but the explanation is here - https://treasurydirect.gov/marketab...ying-through-a-bank--broker--or-dealer-353519

 

[wdwwildbill]

Lots of education here !!!!!

 

[Fermion]

Yes thanks for the info. I put in a order for 40 ($40,000 par) of the 10 year for the Thursday auction.

 

[Another Reader]

The 17 week is posted at TD, but Fidelity has not made it available yet.

 

[MarieIG]

Just put in a small order for the 4 week. Not in the mood to go longer this week.

 

[Fermion]

I meant 10 year TIPS. I feel more comfortable going long duration on TIPS

 

[audreyh1]

The 17 week is posted at TD, but Fidelity has not made it available yet.

Shouldn’t be much longer.

 

[Sunset]

There is a 16 day Bill coming available today !

Not sure it will pay more than the MM/sweep funds that are decent paying.

 

[Another Reader]

I put in orders for the 4 month in a couple of accounts. The shorter duration bills are not much better than the money market funds at the brokers.

 

[MichealKnight]

Treasury - short or longer term

These are funds I won't need for 4 years. (Hopefully

Looking at auction results on Treasury.GOV....

13 week "investment rate" shows 4.25

3 year...'interest rate' shows 4.5%

Part of me likes the idea of locking up 4.5% for 3 years - no fuss no muss.

But I wonder - what if I put the money into the 13 week........and then in a few months see if rate on the 3 year has gone up.

Any opinions? Thanks