On-the-run Treasuries are the most recently auctioned securities at each standard maturity (2-year, 5-year, 10-year, 30-year, and others). They are the benchmark issues that define the yield curve and trade with the tightest bid-ask spreads and deepest liquidity in the Treasury market.
Once a new issue is auctioned at the same maturity, the previous on-the-run becomes off-the-run. Off-the-run securities carry identical credit quality but trade at a small yield premium, the liquidity premium, because fewer dealers and investors actively make markets in them.
The Treasury auctions 10-year notes monthly. Each new issue becomes the on-the-run 10-year the moment it settles, and the previous issue becomes off-the-run. Over time, there can be a dozen or more off-the-run 10-year notes outstanding simultaneously, each representing a prior monthly issuance. The 2-year and 5-year notes follow a similar monthly cadence. The 30-year bond auctions quarterly, so the on-the-run designation turns over less frequently.
For relative value traders, the transition date is meaningful. The newly issued bond typically commands a price premium in the days following auction as index-tracking funds and dealer inventory absorb the supply. Once that demand clears and the next auction approaches, the premium compresses.
Under normal conditions, the yield spread between an on-the-run 10-year note and the most recent off-the-run 10-year note runs approximately 2-5 bps. That gap is compensation for lower liquidity rather than any difference in credit or cash flows.
During the March 2020 COVID stress, the on/off-the-run spread for the 10-year widened to over 25 bps. Investors scrambled to hold only the most liquid instruments, and bid-ask spreads in off-the-run markets deteriorated sharply. The Federal Reserve's emergency Treasury purchase program, announced on March 15, 2020, was partly designed to restore functioning in exactly this segment. Purchases targeted a broad range of maturities specifically because off-the-run liquidity had seized.
The March 2020 episode established an important precedent: the on/off spread is not a stable, arbitrageable gap. It can gap dramatically in a short period, and convergence is not guaranteed without policy intervention.
On-the-run issues frequently trade "special" in the repo market. Specialness means a specific security can be borrowed at a rate below the general collateral (GC) rate, because short-sellers and hedgers are willing to pay up to borrow that particular issue. A 10-year note trading 50 bps special allows the repo borrower to finance at the GC rate minus 50 bps, a significant funding advantage in a low-margin business.
This specialness is a direct consequence of on-the-run status. Futures shorts, options market makers, and relative value funds all want to borrow the current on-the-run to deliver against positions. Once the next auction settles and the issue goes off-the-run, specialness typically collapses toward GC rates within a few weeks as short-covering demand dissipates.
On-the-run status drives activity across several market segments simultaneously.
Futures and derivatives: Treasury futures contracts reference the cheapest-to-deliver from a basket, but that basket is anchored to current on-the-run durations. Interest rate swap desks quote in DV01 terms against on-the-run benchmarks.
Index construction: the Bloomberg U.S. Aggregate and ICE BofA indices rebalance monthly and roll into new on-the-run issues at each rebalancing date. Any fund tracking these indices must transact in on-the-run securities at those dates, creating predictable demand.
Dealer hedging: primary dealers (currently 24 as of 2025) use on-the-run Treasuries to hedge their inventory books in corporate bonds, agency MBS, and structured products. The hedge ratio calculations depend on the DV01 of the current on-the-run.
Relative value: some strategies systematically buy off-the-run Treasuries and short on-the-run issues, capturing the liquidity premium as the newly issued bond ages. The risk is that the spread widens before converging, as March 2020 demonstrated.
Track new auction results and on-the-run yields directly on the Auctions page.
What happens to an on-the-run bond when the next auction occurs?
It becomes off-the-run immediately when the new issue settles. Its coupon, maturity, and CUSIP do not change, but its trading volume and bid-ask spread deteriorate as dealer focus shifts to the new issue.
Can there be multiple on-the-run Treasuries for the same maturity?
No. There is exactly one on-the-run issue per standard maturity at any given time. All prior issues at that maturity are off-the-run.
Why do futures use on-the-run bonds as benchmarks?
Futures require a liquid, standardized reference that all market participants can trade and deliver. On-the-run issues provide that because they have the deepest secondary market and the tightest bid-ask spreads.