How to buy bills in the market without waiting for Treasury auctions. How Can I Invest in Treasury Bills on the Secondary Market?
Acquiring Treasury Bills through Secondary Markets.
Treasury bills are a popular investment option for individuals, especially due to their attractive returns. Recently, the Spanish Treasury held an auction for 6 and 12-month bills that received an overwhelming response from small savers. However, not everyone was able to take advantage of the auction. This article explores the alternative option of acquiring Treasury bills in the secondary market, after the auction has ended.
The Secondary Market
In the secondary market, Treasury bills can be purchased and sold in the same way as shares. The BME Fixed-Income SEND market is one of the markets where the Spanish Treasury’s sovereign debt is listed. Entities and intermediaries can purchase bills on behalf of their clients in this market, apart from the Treasury auction.
However, the majority of individual investors usually invest in bills with the intention of receiving the coupon when it expires. The secondary market also provides the option of selling the asset in case the investor needs the money before the maturity date.
Retail Operations on Sovereign Debt
Retail operations on sovereign debt have seen a significant increase, from 70 in November to 174 in January, indicating a growing interest among individuals. Auriga Bonos, a Spanish brokerage firm specializing in electronic fixed-income trading for individuals, confirms this trend.
The firm has seen a 20% increase in clients and a tenfold increase in operations since November. The platform offers transparency and the best execution of Mifid 2, ensuring that the investor receives the lowest possible purchase price and the highest possible sale price.
Acquiring Treasury Bills from other Countries
Auriga Bonos recently started offering its clients the option of acquiring Treasury bills from countries such as France, Germany, Belgium, Portugal, and Greece. The cost of the operation is 0.25% of the cash, which is higher than the 1.5 per thousand charged for a direct purchase of debt in the Bank of Spain or on the Treasury website but lower than that of many banking entities.
Investing in Treasury bills from other countries in the eurozone is a viable alternative for conservative investors seeking profitability amidst high inflation rates.
Conclusion
The secondary market offers individuals the option of acquiring Treasury bills without having to wait for the Treasury auction. Retail operations on sovereign debt are on the rise, indicating a growing interest among individuals.
Electronic brokerage firms such as Auriga Bono’s provide a platform for individuals to invest in Treasury bills from other countries in the eurozone, offering transparency and competitive commission rates.
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