Five Against Note Spread - FAN

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. Will speculators buy or sell Treasury bond futures contracts if they expect interest ...

  2. What is the difference between the Daily Treasury Long-Term Rates and the Daily Treasury ...

    Find out more about the daily Treasury long-term rates, daily Treasury yield curve rates and the difference between these ... Read Answer >>
  3. What are the maturity terms for Treasury bonds?

    Learn how treasury bonds pay interest, when they reach maturity and the differences between terms for treasury bonds and ... Read Answer >>
  4. 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 >>
  5. Which of the following statements least accurately describes the characteristics ...

    The correct answer is: d) The fact that any number of bonds may be delivered to fulfill a futures contract is an advantage ... Read Answer >>
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