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Webster's New World Finance and Investment Dictionary » bid-to-cover ratio
bid-to-cover ratio
bid-to-cover ratio definition - finance
In
U.S. Treasury auctions, the ratio between the number of bids received and the
number of bids accepted. The measurement indicates how strong investor demand
is for U.S. Treasuries. The higher the ratio, the stronger the demand.
Typically a ratio over 2.0 is an indicator of a strong auction. A low ratio
indicates weak demand and is said to have a long
tail (a wide spread between the average and the high yield).
Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.
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