Trade 2-year U.S. Treasury Note Futures

What are 2-Year Treasury Note Futures?

2-year Treasury note futures are financial instruments that are based on the 2-year U.S. Treasury note. The underlying notes are 2-year government debt securities that can be purchased directly from the U.S. government. These notes are issued at regular intervals and pay a fixed interest rate every six months. 

In general, Treasury futures prices have an inverse relationship with interest rate yields: when interest rates rise, bond and note prices decrease. When interest rates fall, bond and note prices increase.  

Why Trade 2-Year U.S. Treasury Note Futures?

By tracking and monitoring 2-year Treasury note futures, traders can potentially gain insights into current economic conditions. This is because bonds and note futures often serve as bellwethers for economic growth, inflation expectations, and U.S. central bank policy. Trading 2-year Treasury futures offers other benefits, including: 

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Direct exposure to speculate on the price movement of 2-year notes and the interest rate yield

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Tight bid-ask spreads, along with fair and transparent pricing and orders

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Go long or short based on real-time price movement of 2-year notes 

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Nearly 24-hour access to highly liquid, cost-effective trading

Reduced Financial Commitment With Micro Treasury Yield Futures

Micro Treasury interest rate yield futures offer a way to access the interest rate yields of bonds and notes with lower capital requirements at around ¼ the size of standard note contracts.  

*Leverage increases the potential risk of futures trading. Only risk capital should be used for trading. 

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Who Trades 2-Year Treasury Note Futures?

2-year Treasury futures traders typically fall into one of three groups: 

  1. Commercial traders are large commercial traders (e.g., banks, credit unions) that typically trade 2-year note futures to hedge interest rate exposure. For example, large banks that hold a portfolio of short-term commercial loans can mitigate their risk of changes in interest rates.  
  2. Professional traders include commodity pool operators, proprietary trading firms, hedge funds, and institutional investors. These traders speculate on the price movement of 2-year note futures and typically do not take delivery. Together, commercial and professional traders make up the vast majority of daily trading volume. 
  3. Self-directed non-reporting retail traders speculate on the price movement of 2-year note futures contracts and generally do not take delivery.

What Can Affect the price of 2-year u.s. treasury futures?

While interest rates remain the primary driver of price direction, there are additional factors that can impact 2-year Treasury futures pricing.

Inflation Prediction

While predicting inflation is not an exact science, collective market expectations can impact note prices in the future. For example, if traders anticipate higher inflation, then the two year note futures may decline in price to offset potentially lower purchasing power and higher interest rates.

Federal Reserve Changes

If the Fed makes significant changes, such as raising or lowering the federal funds rate, it can impact expectations of interest rates over both the short- and long-term. These interest rate expectations can also impact the price of 2-year futures.

Domestic Economic Reports

Key economic indicators such as the national unemployment rate, overall manufacturing output, and GDP changes can impact interest rate sentiment and therefore futures contract pricing. It’s worth noting that updates and adjustments to GDP happen monthly, with final GDP numbers reported each quarter. Traders need to stay aware of these reports if they want to make more informed trading decisions. 

It’s also important to keep an eye on 2-year Treasury note auctions. Each auction is announced by the U.S. Treasury Department and specifies the amount of debt to be issued. Large financial institutions bid based on the yield they are willing to accept. If demand for new 2-year notes is weaker than expected, 2-year note futures may decline in price; if demand surges, prices may increase. For more information, visit Treasury Direct.


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Risks Of Trading 2-Year Treasury Note Futures

While 2-year Treasury note futures may often exhibit lower volatility versus  some other markets, potential challenges and risks remain. For traders, the primary concern is that prices will go against the trader’s market position, leading to a losing trade.   

Whether you’re trading 2, 5, or 10-year Treasury note futures, it’s important to have a comprehensive risk management plan in place, including appropriate trade sizing and stop loss or trailing stop orders to help reduce exposure and minimize potential losses. 

For newer future traders, these tips can help you streamline your initial trades:   

  • Practice, practice, practice: It’s a good idea to practice in a futures trading simulator that imitates live market conditions. This helps you get used to placing orders and the nature of the price action.  

  • Start small: When making the move to real dollars, it’s important to start small and work your way up as you get your feet under you. Put simply, smaller initial orders mean smaller potential losses. 

  • Build a trading plan: By building a futures trading plan that contains clear entry and exit criteria, considers specific market conditions, and has a solid risk management plan, you can avoid many common futures contract pitfalls.

2-Year Treasury Note Futures Contracts Specifications

2-year Treasury note futures have a face value at maturity of $200,000. The minimum price fluctuation is 1/8 of 1/32 of one point (0.00390625), which equals $7.8125.


2-year Treasury Note Futures
Trading hoursSunday – Friday, 6:00 pm – 5:00 pm ET
Daily maintenance
Monday – Thursday, 5:00 pm – 6:00 pm ET
Futures contract symbolsZT (CME Globex) 26 (CME ClearPort) 26 (Clearing) ZTT (TAS) 
Listed contractsQuarterly (March, June, September, December), listed for 3 consecutive quarters 
Settlement methodDeliverable
Additional specificationsSee more from CME Group

Become a 2-Year Treasury Note Futures Trader Today

Ready to start trading 2-year Treasury note futures? NinjaTrader can help.

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FAQs About 2-Year Treasury Note Futures

A 2-year Treasury note futures contract is a standardized and exchange-traded with a notional value of $200,000. The contact’s deliverable instrument is a qualifying U.S. 2-year Treasury note as defined by the exchange. Like their 5- and 10-year counterparts, 2-year contracts have a unique set of specifications that are set by the futures exchange.
You can trade 2-year Treasury note futures on the CME Globex exchange. Orders are matched on a centralized exchange with standardized contract specifications and transparent pricing.
Yes, NinjaTrader offers tools and support to help you trade 2-year Treasury note contracts. With low commissions and low margin rates, you can trade on a wide variety of futures markets worldwide, including Treasury note futures.

As with any futures contract, returns are not guaranteed. The price of futures may go against the trader’s position, necessitating a change in strategy or a stop-loss to minimize the impact. Multiple factors can influence the price of 2-year Treasury note futures, including rising and falling inflation, interest rate news, and global economic factors.

^In any futures market where there is physical delivery, to prevent the possibility of physical delivery, it is NinjaTrader’s policy to close all open futures positions one day prior to first notice date or one day prior to last trading day, whichever is earlier.