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Stop-Through

A stop-through is the opposite of a tail: the Treasury auction’s high yield comes in below the when-issued yield at the bidding deadline. Investors were willing to accept less yield than the market was offering seconds earlier: demand exceeded what the screens implied.

Desks treat a stop-through as an unambiguous bullish signal for that maturity. Because the when-issued market already prices in all public information, a stop-through reveals hidden buyers, often foreign central banks or pension funds bidding through indirect channels, who wanted the paper badly enough to concede on price.

  • A stop-through of 1bp or more, paired with an above-average bid-to-cover and a strong indirect award, is about the cleanest demand signal an auction can print.
  • Repeated stop-throughs at one tenor tell you the market is under-positioned for duration there.

Worked example: The when-issued 2-year yield is 3.982% at 1:00 p.m. The auction stops at 3.958%, a 2.4 basis point stop-through, with bid-to-cover at 2.71x versus a 2.55x average and indirects taking 68%. Two-year yields rally 3bp on the print, and the front end outperforms for the rest of the session as shorts cover into unexpectedly deep demand.

On the Helious desk right now

WORKED EXAMPLE: LAST FIVE 10-YEAR NOTE AUCTIONS, MEASURED BY HELIOUS
DATEHIGH YIELDTAIL VS WHEN-ISSUEDBID-TO-COVERINDIRECT
4.683% +0.1bp tail 2.53 76.7%
4.580% -0.6bp through 2.59 81.5%
2.438% not captured 2.30 65.2%
4.538% not captured 2.57 78.2%
4.468% not captured 2.40 64.0%
A tail needs the when-issued yield as it stood seconds before the 1:00 p.m. ET deadline, which appears in no official file, so rows Helious did not capture live show no tail rather than a guess. Full history on the 10-Year Note hub, downloadable at the tails dataset.

FAQ

What is a stop-through?

A stop-through is the opposite of a tail: the auction's high yield came in BELOW the when-issued yield, so buyers accepted less yield than the market expected. It signals genuine demand and usually bids the whole curve. Helious records the stop against the when-issued yield on every coupon auction at the auctions board.

Is a stop-through good or bad?

Good, for the Treasury and usually for bonds. It means the auction cleared through the market's own pricing, so real money was willing to pay up. Read it with the bid-to-cover and the indirect share: a stop-through on strong indirect demand is a genuinely firm auction, while one on a thin cover can just mean dealers stepped back.

How is a stop-through measured?

In basis points, as the when-issued yield minus the stop-out yield, taken at the 1:00 p.m. ET bidding deadline. A negative tail is a stop-through. Helious quotes it the same way on every tenor so the numbers compare across auctions, and the method is written down in the methodology.
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