Bill Auction

Treasury bills, aka T-bills, are auctioned off by the U.S. Treasury at a weekly bill action. T-bills are short-term (under a year) securities meant to help the U.S. dig themselves out of the canyon of debt, bit by bit. T-bills are backed by the U.S. government, making them risk-free.

While there are investors, both people and institutions, that can submit bids for T-bills, there are “primary dealers” who have to submit bids every bill auction. They typically have a par value, under which they are sold. Think: Par at $1,000 for bonds coming due in 9 months being auctioned such that they sell for $973.12, and then boringly come due when the baby IPOs.