TL;DRTreasury futures track US government bonds at various maturities. The 10-Year Note (ZN) and 30-Year Bond (ZB) are the most traded. These markets are directly influenced by Federal Reserve policy and inflation data. Treasury futures are among the most liquid contracts globally but require understanding of bond math and yield relationships.
Treasury futures are contracts based on US government debt securities. They allow traders to speculate on or hedge against changes in interest rates without buying or selling actual bonds.
The contracts are priced in points and 32nds of a point (a holdover from the bond market's fractional pricing system). One point on ZN (10-Year Note) is worth $1,000. The minimum tick is one-half of 1/32 of a point, which equals $15.625 per tick.
Treasury futures are physically delivered, meaning the short position must deliver eligible Treasury securities to the long position at expiration. In practice, most traders close or roll well before this happens.
10-Year T-Note (ZN) is the most actively traded Treasury future. It tracks the 10-year US Treasury note and is the benchmark for mortgage rates and corporate borrowing costs. Each point is worth $1,000.
30-Year T-Bond (ZB) tracks the long bond. More volatile than ZN because longer-duration bonds are more sensitive to interest rate changes. Each point is worth $1,000.
5-Year T-Note (ZF) is popular for trading the middle of the yield curve. Less volatile than ZN and ZB. Each point is worth $1,000.
2-Year T-Note (ZT) tracks short-term rates and is most sensitive to Fed policy expectations. Each point is worth $2,000.
The relationship between these contracts reflects the yield curve. Trading the spread between ZN and ZB (or ZN and ZT) lets you express views on yield curve steepening or flattening without taking outright directional risk.
Federal Reserve policy is the dominant driver. Rate hikes push bond prices down (yields up). Rate cuts push bond prices up (yields down). The market often moves more on the Fed's forward guidance and dot-plot projections than on the actual rate decision.
Inflation data moves treasuries significantly. Higher-than-expected CPI, PPI, or PCE readings push bond prices down because inflation erodes the value of fixed coupon payments. Lower-than-expected readings push prices up.
Bond prices and yields move inversely. This is the most important concept for trading treasuries. When you buy ZN, you are betting that interest rates will fall (bond prices rise). When you sell ZN, you are betting rates will rise (bond prices fall).
Treasury auctions (2-year, 5-year, 7-year, 10-year, and 30-year) occur regularly and can move markets. Strong demand at auction (low yields, high bid-to-cover ratios) is bullish for bond prices. Weak demand is bearish.
Economic growth expectations also matter. Strong growth tends to push rates higher (bearish for bonds). Recession fears push rates lower (bullish for bonds) as investors seek safety.
Treasury futures trade on CME Globex from Sunday to Friday, 5:00 PM to 4:00 PM CT, with a daily 60-minute break.
The primary session runs 7:20 AM to 2:00 PM CT. Economic data releases (CPI, employment, GDP) typically occur at 7:30 AM CT and can cause immediate, large moves in treasuries.
FOMC rate decisions are announced at 1:00 PM CT, followed by the Chair's press conference at 1:30 PM CT. These are the most volatile events for Treasury futures.
Treasury futures are also heavily influenced by European trading, particularly during the London session. ECB policy decisions and European economic data can move US Treasuries.
Banks and institutional investors are the primary participants. They use Treasury futures to hedge their bond portfolios, manage duration risk, and adjust interest rate exposure.
Mortgage companies and real estate firms hedge against rate changes using ZN and ZB futures.
Macro hedge funds trade Treasury futures to express views on monetary policy, inflation, and economic growth. Yield curve trades (long one maturity, short another) are a staple strategy.
Retail traders should understand that Treasury futures require knowledge of bond math, yield relationships, and the inverse price-yield dynamic. They are not as intuitive as equity index futures for beginners. However, for traders who understand these concepts, treasuries offer clean trends and high liquidity.
| Symbol | Name | Exchange | Point value | Tick size | Tick value | Settlement | Months | Micro |
|---|---|---|---|---|---|---|---|---|
| ZN | 10-Year T-Note | CBOT | $1,000 | 1/64 | $15.625 | Physical | H, M, U, Z (quarterly) | 10Y ($100/pt) |
| ZB | 30-Year T-Bond | CBOT | $1,000 | 1/32 | $31.25 | Physical | H, M, U, Z (quarterly) | None |
| ZF | 5-Year T-Note | CBOT | $1,000 | 1/128 | $7.8125 | Physical | H, M, U, Z (quarterly) | None |
| ZT | 2-Year T-Note | CBOT | $2,000 | 1/128 | $15.625 | Physical | H, M, U, Z (quarterly) | None |
Trading hours: Sun-Fri, 5PM-4PM CT. Verify current specs with the exchange.