five against bond spread (FAB)

Definition

An investment strategy that attempts to take advantage of the difference in interest rates for short-term and long-term treasury bonds. The investor shorts the 5 year future contracts for these bonds while taking an offsetting long position for 15 to 20 year contracts (or vice versa depending on the circumstances).
Browse Definitions by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
fitch sheets five against note spread (FAN)