What is the best way to buy Treasury Bills and get them into my brokarage account (I am with IB but I guess question is similar for other brokers)? I would like to use them as margin for futures positions. I would have thought that the most economic way is to buy them at the auctions but how can I then get them into my brokarage account? Or is there a way to somehow participate in the auction and get the T-Bills straight into my brokarage accounts? I looked at the secondary market as well but it looks very illiquid with a big bid-offer.
as an individual, the only way to participate in t bill auction directly is set up an account with treasurydirect.gov, and the only option for you is noncompetitive bid (competitive bid is for institutions). with a noncompetitive bid, you agree to accept the high rate, yield, or discount margin set at auction. there's also a limit of $5 million per bid per auction. at the close of an auction, treasury awards all noncompetitive bids that comply with the auction rules.
once you receives you t bills, you can transfer them from treasurydirect to the commercial book-entry system. in the commercial system, you own the securities through a broker or bank.
in treasurydirect, under "manage direct," choose the appropriate option for making a transfer and supply the requested information. you'll be asked for the routing number and name of the financial institution to which you're making the transfer.
The following user says Thank You to shzhning for this post:
Do you (or others) think that buying at the auctions is worth the hassle of transferring cash and T-bills back and forth, as opposed to just buying them on the secondary market with my broker? I know it is a general question and I can imagine it depends on several factors, but even a rough quatification of the difference would be helpful. Like I mentioned above I am not looking to trade in T-Bills just want to use them as margin for Futures.
That link just tells you how to input orders for Treasuries on TWS which is pretty trivial. My problem is not how to input orders on TWS for T-Bill but I am more concerned about the bid-offer spreads I see. Say, Jun 25 2015 T-Bill shows right now 99.948/99.962 which is over 0.2 bid-offer which seems huge. Then if I look at historical charts on TWS then there is one trade every few hours which is far from the liquidity I was expecting for T-Bills. Why is that?
I have no clue about T-Bills trading/investing and I don't want to become an expert at it, I just want to buy them at a reasonable price and without a lot of hassle and use them as margin for Futures. Anyone can suggest some way to that please? Or at least where I can learn more about that?