How treasury bills are sold?

Treasury bills are sold using the auction technique. The marketplace, Not the U.S. treasury, sets bill prices and yields. A new regular bull issue is announced by the treasury on treasury of each week, with bids from investor due the following Monday at 1:30 p.m., eastern standard time (unless a federal holiday intervenes). Interested investors fill out a form tendering an offer to the treasury for a specific bill issue at a specific price. These forms must be filed by the Monday deadline with one of the 37 regional Federal Reserve banks or branches. The interested investor can appear in person at a Federal Reserve Bank or branch to fill out a tender from, submit the form by mail, or place an order through a security broker or bank.
the treasury will entertain both competitive tenders typically are submitted by large investors, including commercial banks and government securities dealers, who buy several million dollars worth at one time. Institution submitting competitive tenders bid aggressively for bills, trying to offer the treasury a price high enough to win an allotment bills but not too high, because the higher the price bid, the lower the rate of return. Noncompetitive tenders (normally less than $500,000 each) are submitted by small investors who agree to accept the average price set in the weekly or monthly bill auction. Generally, the Treasury fills all noncompetitive tenders for bills.
In the typical bill auction, Federal Reserve officials open all the bids at the designated time and array them from the highest down to the lowest price.
For example, a typical series of bids in a Treasury bill auction might appear as follows:

Note that all bids are expressed on a $100 basis as though T-bills have a$100 par value. In fact, the minimum denomination for bills is $10,000, and they are issued in multiples of $5,000 above that minimum. The highest bidder (in this case the one offering tTreasury bills are sold using the auction technique. The marketplace, Not the U.S. treasury, sets bill prices and yields. A new regular bull issue is announced by the treasury on treasury of each week, with bids from investor due the following Monday at 1:30 p.m., eastern standard time (unless a federal holiday intervenes). Interested investors fill out a form tendering an offer to the treasury for a specific bill issue at a specific price. These forms must be filed by the Monday deadline with one of the 37 regional Federal Reserve banks or branches. The interested investor can appear in person at a Federal Reserve Bank or branch to fill out a tender from, submit the form by mail, or place an order through a security broker or bank.
the treasury will entertain both competitive tenders typically are submitted by large investors, including commercial banks and government securities dealers, who buy several million dollars worth at one time. Institution submitting competitive tenders bid aggressively for bills, trying to offer the treasury a price high enough to win an allotment bills but not too high, because the higher the price bid, the lower the rate of return. Noncompetitive tenders (normally less than $500,000 each) are submitted by small investors who agree to accept the average price set in the weekly or monthly bill auction. Generally, the Treasury fills all noncompetitive tenders for bills.
In the typical bill auction, Federal Reserve officials open all the bids at the designated time and array them from the highest down to the lowest price.
For example, a typical series of bids in a Treasury bill auction might appear as follows:
Hypothetical bid price for three-months U.S. Treasury bills
$99.115
$ 99.113
$ 98.985
$98.982
.
.
.
97.729
97.664
97.657
Note that all bids are expressed on a $100 basis as though T-bills have a$100 par value. In fact, the minimum denomination for bills is $10,000, and they are issued in multiples of $5,000 above that minimum. The highest bidder (in this case the one offering to pay $99.155) receives his bills, and those who bid successively lower prices also receive their bills, until all available securities have been allocated.
The lowest price at which at least some bills are awarded is called the stop-out price. Let‘s suppose that this is a price of $97.729, the third price from the bottom in the array of prices shown above. No one bidding less than the stop-out price will receive any bills in this particular auction. However, once bills are acquired by successful bidders, many of them will be sold right away in the secondary market, giving the unsuccessful bidders a chance to add to their T-bill portfolio. Payment for bills won in the auction must be made in federal funds, cash, by redeeming maturity bills, or, when permitted by the Treasury, through crediting tax and loan accounts at banks. All bills today are issued only in book-entry form.
o pay $99.155) receives his bills, and those who bid successively lower prices also receive their bills, until all available securities have been allocated.
The lowest price at which at least some bills are awarded is called the stop-out price. Let‘s suppose that this is a price of $97.729, the third price from the bottom in the array of prices shown above. No one bidding less than the stop-out price will receive any bills in this particular auction. However, once bills are acquired by successful bidders, many of them will be sold right away in the secondary market, giving the unsuccessful bidders a chance to add to their T-bill portfolio. Payment for bills won in the auction must be made in federal funds, cash, by redeeming maturity bills, or, when permitted by the Treasury, through crediting tax and loan accounts at banks. All bills today are issued only in book-entry form.