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Five Against Bond Spread- FAB


What does Five Against Bond Spread- FAB mean?

A spread between opposite positions taken for five-year Treasury bonds and long-term Treasury bonds. Five Against Bond Spread trade takes advantage of the difference in interest rates for short-term and long-term treasury bonds. The long term bonds may be for fifteen to thirty years.

Futures Knowledge Explains Five Against Bond Spread- FAB

You may buy a five-year Treasury bond futures contract and sell a long-term Treasury bond futures contract. Or it may vice versa. You may sell of a five-year Treasury note futures contract and buy a long-term Treasury bond futures contract.  Your strategy will depend on the prevailing economic and market environment.



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