Business Definition for: nob spread
nob spread
acronym for notes over bonds spread. Traders buying or selling a NOB spread are trying to profit from changes in the relationship between yields in Treasury notes, which are intermediate-term instruments maturing in 2 to 10 years, and Treasury bonds, which are long-term instruments maturing in 15 or more years. Most people trade the NOB Spread by buying or selling futures contracts on Treasury notes and Treasury bonds.
See also
mob spread
Related Terms:
difference in yield between a tax-free municipal bond and a Treasury bond with the same maturity. Term is an acronym for municipals-over-bonds spread, which will always exist because municipals involve different degrees of risk while Treasuries are riskfree as to principal. The spread between a "muni" of a given rating and a Treasury with the same maturity has significance in tax decisions and in transactions involving financial futures contracts.
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