Prospective investors submit bids electronically through Treasury Direct or the Treasury Automated Auction Processing System (TAAPS) which accepts bids up to 30 days in advance of the auction.
Suppose the Treasury seeks to raise million in two-year notes with a 5% coupon.
However, the price that each bidder pays is based on the lowest price of all the allotted bidders, or essentially the last successful bid. Treasury uses a Dutch auction to sell its securities.
Therefore, even if you bid 0 for your 1,000 shares, if the last successful bid is , you will only have to pay for your 1,000 shares. To help finance the country's debt, the US Treasury holds regular auctions to sell Treasury bills (T-bills), notes (T-notes), and bonds (T-bonds), collectively known as Treasuries.
From 1980 - 2001, the pop in first day trading was 18.8%.That figure jumped to 77% in 1999 and in the first half of 2000.