The ask price of a financial asset should be higher than its bid price. That's because an investor isn't expected to sell it (asking price) for lower than the price they ♑are willing to pay for it (bidding price). But, the way the bid/ask price for U.S. Treasury Bills (T-Bills) is quoted makes it look like the ask price is lower than the bid price. Here's why quotes may be confusing and how you can understand them.

How Bid/Ask Is Quoted for T-Bills

Since there is more than one method of quoting the 澳洲幸运5官方开奖结果体彩网:bid and ask prices of T-bills, the quoted ask pricꦰe may simply be perceived as being lower than the bid. However, it is possible to convert the prices quoted so that you can see an accurate comparison of the bid and ask pri🌳ces.

For example, one common quote that you may see for a 365-day T-bill is July 12th, bid 2.35%, ask 2.25%. At first glance, the bid seems to be higher than the ask. But, upon further inspection, you'll notice that the ask is higher. The reason is because a T-bill is a 澳洲幸运5官方开奖结果体彩网:discount bond, and these percentages are the quoted yields, not the actual prices.

How to Understand Pricing

If we convert the bid and ask discount yields into the dollar amounts of the prices, we get a bid of $97.65 and an ask of $97.75. The bid is lower than the ask. The quotes on T-bills may show the actual prices, in which case you don't have to convert or calculate anything. The same T-bill above, therefore, may be quoted with a bid of 97.65 and an ask of 97.75.

So, as the dollar amount of the bid should be lower than the ask, the bid's quoted yield percentage should be higher than the ask's quoted yield percentage. The two different kinds of quotes are just different ways of saying the same thing.