5-Year T-Note Futures

5-Year T-Note Futures Markets

Five-Year Treasury Note (T-Note) futures are crucial for investors focusing on medium-term government debt instruments. T-Notes are issued by the U.S. Treasury and are a popular choice for managing risk associated with interest rate fluctuations. They serve as a benchmark for various types of financial products, including mortgages and loans, reflecting broader economic conditions and monetary policy expectations.

5-Year T-Note Futures – Contract Specs

Contract Symbol	Contract Units	Price Quotation	Trading Exchange	Trading Hours	Tick Value
ZF	$100,000	points and fractions of points with par on the basis of 100 points	CME GLOBEX	17:00 – 16:00	1/4 of 1/32 of one point (0.0078125) = $7.8125

5-Year T-Note Futures History

Five-Year T-Note futures have been traded for decades, offering market participants a reliable and standardized method to hedge against or speculate on changes in interest rates over a medium-term horizon. Their introduction has facilitated more dynamic risk management and investment strategies, allowing participants to respond to economic forecasts and policy changes effectively.

5-Year T-Note Futures Facts

• Contract Size: Each T-Note futures contract represents $100,000 face value of a U.S. Treasury note.
• Settlement: The contracts are settled by physical delivery of the T-Notes, ensuring alignment with the actual securities market.
• Trading Utility: T-Note futures are used extensively for hedging interest rate risks and adjusting fixed-income portfolio durations. They are also valuable for institutional investors and treasury managers to lock in borrowing costs or investment returns ahead of anticipated rate movements.

Trading 5-Year T-Note Futures

Trading in Five-Year T-Note futures involves strategic positioning against the backdrop of shifting economic indicators and Federal Reserve policies. These futures are actively traded on platforms like the Chicago Mercantile Exchange (CME), where liquidity is robust, providing ease of entry and exit for traders. Common users include financial institutions, hedge funds, and government agencies, who leverage these futures to manage exposures to interest rate movements, finance government deficits, or invest in stable, government-backed securities. This vital trading tool helps stabilize portfolios against the uncertainty of rate changes and economic fluctuations.