Bond Market Basics

 10/1/2026

Just to make it convenient this is a reprint of my 10/28 post on the bond market.

Here we discuss trading hours and details of the primary dealers.

Click here to learn about the Govt Primary Dealer System

 Wed 10/28/2026

As predicted no change 

OK it is 23:471 CST so the day is not over 

Bond Market Trading Hours

Understanding the trading hours for bonds is essential.

• Core Trading Hours — The U.S. bond market operates from 8:00 AM to 5:00 PM ET, equivalent to 7:00 AM to 4:00 PM CT.
• Early Closures — On specific holidays, the bond market may close early, typically at 2:00 PM ET (1:00 PM CT).
• Electronic Trading — For highly liquid instruments like U.S. Treasuries, trading can occur for up to 22 hours a day on electronic platforms, pausing briefly around 5:00 PM ET.
• Auction Times — The NYSE conducts bond auctions at 4:00 AM and 8:00 AM ET, with continuous trading following these auctions.

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I sold my TLT around 81.55 yesterday,  here is the result of today's announcement. By the way

Oct 27 - Pct 8 is 19 days and $400 round numbers.  again rounding350 days in a year divided by 20 trading days is 17.5 times that  20 days happens in 350 days so 400/7700 = 5% times 17.5 is 89% return. That would be ideal if the market never stood still as it often does and remember there are holidays and interruptions in trading when things slow so this remains a very idealized number. But it does show that low risk small trades can add up.

Or buying 1,000 shares would have made $4,000.  

 This is what I call a dual chart, OHLC is TLT and purple line is TBF. This is the result I expected and said so which is why I sold TLT yesterday. My below market bid di not happen for TBF, nothing lost and remember that. I did buy a few hundred TBF shares today at the market. 

I will start tracking our results on trading TLT, TBF, and TBT. TBT is a 2x ETF which is leveraged twice that of TLT. 

Date	B/S	Issue		Price	Gain
2026					(Loss)
30-Sep	B	TLT		77.71
27-Oct	S	TLT		81.55	384
6-Oct		TLT	Div		31.16

 

Here is the flip side of price which is yield. RSI top and PMO bottom have jumped, the turn appears to be in. If not we buy TBF cheaper tomorrow. To me this makes a lot more sense than guessing which Ai stock will pop next. 

 

So the market disagrees with the FED, the two dissents, both women by the way, were for higher rates. 

Nothing much to report on stocks. Still no date for the Anthropic IPO. See the article in today's WSJ on how the firm is massaging their numbers to diminish the large losses of the last two years. 

The Nov 2 election may be the next big news event for the stock market.  A DEM take of the House seems certain Senate we shall see. Trump is scurrying around TX trying to boost support for his terrible choice of Paxton 

Why my focus on bonds?  OK the four points in less than a month on TLT is not a big deal. But if we can nail consistent results like that month in month out, there will be larger moves. This does not require reading the AI tea leaves.  Rather dual charts, ratio charts and regular charts simply tracking social mood toward inerest rates. TBF trades at one third or so the price of TLT but easier to buy more at a lower price.  

Not exciting enough, well here are the margin requirments on govt bonds

 

The margin requirement for government bonds typically involves a minimum of 10% of the market value for investment-grade bonds. For non-investment grade bonds, the requirement is the greater of 20% of market value or 7% of face value.

Margin Requirements for Government Bonds

Understanding margin requirements is crucial for bond investors.

• Investment-Grade Bonds — The regulatory minimum margin is 10% of market value.
• Non-Investment Grade Bonds — The minimum margin is either 20% of market value or 7% of face value.
• Purpose of Margin — Margin requirements help mitigate risk for lenders and investors.
• Market Fluctuations — Margin requirements can change based on market conditions and bond ratings

One can buy $1M worth of thirty year T bonds for $100,000 margin. The AI comment is incorrect. this margin does not mitigate risk, it increases it. The reson for the low margin is so the 28 primary govt bond dealers can afford the large amounts they buy from the govt during the bond auctions.

 

As of now, there are 24 primary dealers of U.S. government bonds. These institutions are authorized to bid on newly issued government securities and play a crucial role in the financial markets.

Overview of Primary Dealers

Primary dealers are essential to the U.S. government bond market.

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• Definition — Primary dealers are the only entities allowed to bid on newly issued government securities.
• Role — They underwrite new government debt and act as market makers for the Federal Reserve.
• Auction Participation — Each dealer is expected to bid their pro-rata share of each auction, calculated based on the total amount auctioned.
• Current List — The Federal Reserve Bank of New York maintains a list of the current primary dealers.

 See there is a lot to learn here at the blog!

What are primary dealer requirments and what is their function?