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.