When your wife hogs the blankets. Oh, wait. That's bed-to-cover ratio.
It's a way to measure demand for a security that is being sold via an auction. The figure consists of the currency value of bids received compared to the currency value of the amount of securities available. It can theoretically be used in almost any context, though it is used regularly with sale of Treasury bonds.
The U.S. government regularly runs auctions for newly issued Treasury bonds. Among the auction statistics released along with the auction results (which provide information on things like duration and yield), the government reveals the bid-to-cover ratio for that particular auction. This provides the market with a signal of Treasury demand, which can, in turn, affect bond trading.
Say the government is selling $10 billion worth of 10-year notes. It received $25 billion in bids, meaning that people have put in orders to buy $25 billion worth of the offering. The bid-to-cover ratio would be 2.5 for that particular auction.
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Finance: What is an Auction Market?13 Views
Finance a la shmoop... what is an auction market.. next up on the block [Man speaking on stage]
we've got stock in the company comb Depot....
okay yeah so the New York
Stock Exchange is an auction market and you have no idea how much caffeine I had [Man holding a monster energy drink]
to have to get that right which means that the prices on the new york stock
exchange happen during a bidding process we're matching offers get you know [People frantically rushing to bid for stocks]
matched... buyers and sellers buy and sell at the
same time so in essence two transactions are happening at once the opposite of
this sort of market is the over the counter or OTC market where dealers are
the ones holding all the cards and they ultimately determine the price by [Dealer with the cards]
creating a spread from where they're willing to sell your shares and what
price they'll pay to buy your shares but in an OTC market well you don't get to [Dogs running side by side]
feel like you're watching the last leg of a greyhound race so you don't get all
my caffeinated auction talk there which is kind of cool we like that, right..right?
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