Business and Personal Finance Dictionary

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• ON-THE-RUN TREASURY
  
  Definition: The most recently issued U.S. Treasury note or bond of a given initial Maturity. Also known as the Current Coupon issue. Example: For example, when the Treasury auctions a new two-year note it becomes the new On-the-Run two-year note. Risk Management: The On-the-Run issues tend to be the most liquid – i.e., they have the smallest bid-ask spreads. That makes them most attractive as hedging instruments. Comment: After the Treasury announces that it will auction a specific security (defined by maturity and coupon), but before the auction, the bond may trade in the When Issued Market (). After the auction, this security becomes the new On-the-Run Issue for its maturity. The previous On-the-Run becomes an Off-the-Run issue.
  
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