BrokerTec launches US Treasury benchmark spread trading

Dan Barnes

Electronic bond market operator BrokerTec, has launched Relative Value (RV) Curve spread trading, allowing clients to trade cash US Treasury benchmark spreads in a single order for the first time. As a result, market participants should be able to trade spreads across the yield curve more efficiently and without legging risk.

“Following the successful migration of BrokerTec onto the CME Globex platform, we are pleased to launch the RV Curve product that creates a new, single order type to merge implied spreads from outright order books with true spread orders for US Treasuries,” said Sean Hodgson, executive director, BrokerTec Products. “RV Curve will increase matching opportunities and enhance overall liquidity and market efficiency for our clients through a more effective execution of cash Treasury spreads.”

Through BrokerTec RV Curve, market participants can trade pre-defined ratio spreads between cash benchmark US Treasuries as a yield differential.

All spreads tradable will be available at 1/8th of a basis point (0.00125), regardless of the minimum price increment of the underlying instruments, providing greater matching and liquidity opportunities. RV Curve offers 21 spreads, providing a full view of the relationships between 2-year, 3-year, 5-year, 7-year and 10-year Treasury notes and 20-year and 30-year Treasury bonds.

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