Curve Steepener Trade

Categories: Bonds and Treasuries, Economics,

A macroeconomic hedging strategy using derivatives to exploit the changing relationships of the yield curve between short-term treasury securities and long-term treasury securities. Used primarily to hedge against a widening yield curve due to an increase in long-term yields versus short-term yields, the trade is executed by assuming a long position in a short-term Treasury and a short position in a long-term Treasury.