2 year Treasury (Expiring Future)

The 2-Year Treasury Future was created to keep track of the movements and performance of US Treasury Notes that have a maturity of two years. The 2-Year Treasury uses the index code 2yUS and is traded on the CME stock exchange and expires on a quarterly basis. The underlying asset of the future incorporates a delivery bond basket that defines the range of bonds that can be delivered by maturity, and maintains the integrity of futures prices by ensuring that they are very closely tied to the prices of U.S. government bonds and their yields (interest rates). The market pricing of futures contracts is generally based on the cheapest to deliver (CTD). This is the cheapest security that can be delivered in a futures contract to satisfy the contractual obligations - usually at a certain rate and within a certain maturity range. Treasury futures are commonly used as a benchmark when determining interest rates, such as mortgage rates. Their yield is often considered as a benchmark for risk-free interest. The 2-Year Treasury Future is based on recent auctions of US Treasury notes that mature in two years. Treasury notes are available with either a competitive or non-competitive bid. Purchasing via competitive bid involves the investor specifying the yield they will accept, whereas with non-competitive bids, the yield is determined by auction. Prices and yields have an opposite correlation – yields are boosted by falling prices, whereas a rise in prices can lower yields. Managed by Bloomberg Professional Services, the 2-Year Treasury Future acts as a representation of how investors feel about the current economic environment. Treasury notes, which are sold in multiples of $100, pay interest on a semi-annual basis until the note matures – at which point the Treasury pays the par value. Add 2yUS to your eToro virtual portfolio to monitor any changes to this future.