What does off-the-run mean in finance?
What does off-the-run mean in finance?
Off-the-run Treasuries are those that have been issued before and remain outstanding.
What are off-the-run securities?
Off-the-run treasuries refer to any Treasury security that has been issued, except for the newest issue, which are called on-the-run. Off-the-run treasuries tend to be somewhat less liquid than on-the-run securities, although they are still actively traded on the secondary market.
What does off-the-run mean?
Filters. Old bond issues that have been replaced by a newer issue. When a new Treasury or federal agency debt issue comes to market, the older issues become off-the-run. As those issues move further away from their issue date, they become more difficult to trade because they have less liquidity.
What is the yield on the on-the-run bonds?
What is On-The-Run Treasury Yield Curve? The on-the-run Treasury yield curve graphically shows the current yields versus maturities of the most recently sold U.S. Treasury securities and is the primary benchmark used in pricing fixed-income securities.
What is a run finance?
A run is a series of consecutive price increases or decreases in a given security. Often times, traders refer to a run as a bullish rally or a bearish rally.
Do Treasury Strips pay periodic interest?
Treasury STRIPS are U.S. bonds that are sold at a discount to their face value and pay full face value at their maturity. No interest payments are received by STRIPS holders.
Are US Treasuries liquid?
The Treasury bill market is highly liquid; investors can quickly convert bills to cash through a broker or bank. Treasury bills function like zero-coupon bonds, which do not pay periodic interest payments.
Where do Treasuries trade?
U.S. Treasury securities are traded “over-the-counter” between counter-parties. There is no formal exchange (such as the New York Stock Exchange) as exists for the equity markets. Instead, Treasuries are traded over the phone or across Electronic Commerce Networks (ECNs).
Can banks run out of money?
A bank run occurs when large groups of depositors withdraw their money from banks simultaneously based on fears that the institution will become insolvent. With more people withdrawing money, banks will use up their cash reserves and ultimately end up defaulting.
What are runners in the stock market?
What Is a Runner? A runner is short-hand for a junior broker-dealer employee who delivers a trade order to the broker’s floor trader for execution. Runners are often entry-level positions which lead to clerks and ultimately traders or brokers.
Are Treasury strips a good investment?
STRIPS are a popular choice for fixed-income investors. They have extremely high credit quality because they are backed by U.S. Treasury securities. Since STRIPS are sold at a discount, investors do not require a large stash of cash to purchase them.
Do strips provide income?
Tax Treatment For each year the STRIP is held, the cost basis will increase, and a capital gain or loss could be generated if the bond is sold at a price different from the cost basis. If the bond is held until maturity, the entire discount will be classified as interest income.
What are ‘off-the-run treasuries’?
What are ‘Off-The-Run Treasuries’. Off-the-run treasuries are all Treasury bonds and notes issued before the most recently issued bond or note of a particular maturity. These are the opposite of on-the-run treasuries.
What is the Association of run-off companies?
In the United Kingdom, the Association of Run-off Companies (ARC) has existed since 1998. In the USA, a group of insurers and reinsurers have created in 2005 the Association of Insurance and Reinsurance Run-off Companies (AIROC) based in New York, and which currently includes more than 30 members.
What is the difference between on-the-run and off-the-run securities?
On-the-run securities also are the most heavily traded in the secondary market, which is why the price and yield differential is known as the liquidity premium. Conversely, a good portion of previously issued off-the-run securities have already been bought and held by investors and therefore aren’t available in the open market.
What is run-off in insurance?
Run-off: Definition Run-off or winding-up of portfolio consists in managing the incurred or possible claims of the insurance companies having ceased to write policies in one or several classes of business.
