Thursday, September 3, 2009

U.S. Treasury bills and the financial future market

In January 1976, U.S. Treasury bills were declared eligible for trading in the financial futures market. the international monetary market (IMM), A Division of the Chicago Mercantile Exchange, announced that contracts for future delivery would be written on T-bills contracts are for $1 million each, while single contracts on one-year bills carry denominations of $250,000.
Future trading in the bill market has become extremely popular. For example, during 1979 daily average trading in T-bill contracts on the IMM was about $7.5 billion. This was almost as large as the daily volume of spot market trading in T-bills conducted by U.S. government securities dealers.

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