BrokerTec Launches First-Ever U.S. Treasury Benchmark Spread Trading Capability

Rhea-AI Summary

BrokerTec has introduced the first-ever U.S. Treasury benchmark spread trading capability, enabling clients to trade cash U.S. Treasury benchmark spreads in a single order. This innovation enhances trading efficiency across the yield curve while minimizing legging risk. The new RV Curve product allows market participants to trade pre-defined ratio spreads, improving liquidity and execution. The BrokerTec RV Curve features 21 different spreads and offers matching opportunities at increments of 1/8th of a basis point.

Positive

• Launch of RV Curve spread trading increases trading efficiency for clients.
• Enhanced liquidity and market efficiency due to a new single order type.
• 21 spreads available, improving visibility between various Treasury notes and bonds.

Negative

• None.

NEW YORK and CHICAGO, March 24, 2021  BrokerTec, a leading provider of electronic trading platforms and technology services in fixed income markets, this week launched Relative Value (RV) Curve spread trading, allowing clients to trade cash U.S. Treasury benchmark spreads in a single order for the first time.  As a result, market participants are 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 U.S. 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 easily trade pre-defined ratio spreads between cash benchmark U.S. 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.

For more information on BrokerTec's RV Curve, please visit: www.cmegroup.com/rvcurve.

BrokerTec is part of CME Group. As the world's leading and most diverse derivatives marketplace, CME Group (www.cmegroup.com) enables clients to trade futures, options, cash and OTC markets, optimize portfolios, and analyze data – empowering market participants worldwide to efficiently manage risk and capture opportunities. CME Group exchanges offer the widest range of global benchmark products across all major asset classes based on interest rates, equity indexes, foreign exchange, energy, agricultural products and metals.  The company offers futures and options on futures trading through the CME Globex® platform, fixed income trading via BrokerTec and foreign exchange trading on the EBS platform.  In addition, it operates one of the world's leading central counterparty clearing providers, CME Clearing.  With a range of pre- and post-trade products and services underpinning the entire lifecycle of a trade, CME Group also offers optimization and reconciliation services through TriOptima, and trade processing services through Traiana.

CME Group, the Globe logo, CME, Chicago Mercantile Exchange, Globex, and, E-mini are trademarks of Chicago Mercantile Exchange Inc.  CBOT and Chicago Board of Trade are trademarks of Board of Trade of the City of Chicago, Inc.  NYMEX, New York Mercantile Exchange and ClearPort are trademarks of New York Mercantile Exchange, Inc.  COMEX is a trademark of Commodity Exchange, Inc. BrokerTec, EBS, TriOptima, and Traiana are trademarks of BrokerTec Europe LTD, EBS Group LTD, TriOptima AB, and Traiana, Inc., respectively.  Dow Jones, Dow Jones Industrial Average, S&P 500 and S&P are service and/or trademarks of Dow Jones Trademark Holdings LLC, Standard & Poor's Financial Services LLC and S&P/Dow Jones Indices LLC, as the case may be, and have been licensed for use by Chicago Mercantile Exchange Inc.  All other trademarks are the property of their respective owners. TriOptima AB is regulated by the Swedish Financial Supervisory Authority for the reception and transmission of orders /in relation to one or more financial instruments. TriOptima AB is registered with the US National Futures Association as an introducing broker.

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SOURCE CME Group

FAQ

What is the RV Curve spread trading launched by BrokerTec?

The RV Curve spread trading allows clients to trade cash U.S. Treasury benchmark spreads in a single order, enhancing trading efficiency.

How does the RV Curve improve liquidity in U.S. Treasury markets?

The RV Curve improves liquidity by merging implied spreads from outright order books with true spread orders, allowing for better execution.

What are the increments for trading with RV Curve?

All spreads tradable through RV Curve are available at 1/8th of a basis point (0.00125), allowing for greater matching opportunities.

How many spreads does the RV Curve offer?

The RV Curve offers 21 different spreads, providing a comprehensive view of the relationships between various U.S. Treasury instruments.

When was the RV Curve launched by BrokerTec?

The RV Curve was launched on March 24, 2021.