DEFINITION of 'Five Against Note Spread - FAN'

A spread in the futures markets created by taking offsetting positions in futures contracts for five-year treasury notes and ten-year treasury bonds.

BREAKING DOWN 'Five Against Note Spread - FAN'

A FAN spread is created by either buying a futures contract for five-year treasury notes and selling a futures contract for ten-year treasury bonds or vice versa. Investors speculating on interest rate fluctuations will enter into this type of spread in hopes of under or overpriced treasuries.

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RELATED FAQS
  1. Why are treasury bond yields important to investors of other securities?

    Learn about the wide-ranging impact of U.S. Treasury Bond yields on all other interest-bearing instruments in the economy ... Read Answer >>
  2. Which economic factors impact treasury yields?

    Discover the economic factors that impact Treasury yields. Treasury yields are the benchmark yield for the rest of the world, ... Read Answer >>
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    Find out more about the daily Treasury long-term rates, daily Treasury yield curve rates and the difference between these ... Read Answer >>
  4. What are the maturity terms for Treasury bonds?

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  5. The interest rate used to define the “risk-free” rate of return is the:

    a. discount rate.b. 90-day Treasury bill rate.c. five-year Treasury note rate.d. federal funds rate. Answers: bThe 90-day ... Read Answer >>
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