Bid-to-Cover Ratio

This is the key measure of demand in an auction of Treasury bills, notes or bonds. It thinks about the volume of securities that dealers enter bids for to the volume offered available to be purchased. For instance, in the event that the Treasury makes $10 billion of securities available for purchase and dealers enter bids for a total of $20 billion, the auction delivers a bid-to-cover ratio of 2.
An auction is judged effective on the off chance that it delivers a bid-to-cover ratio fundamentally higher than the average bid-to-cover ratio for the previous dozen auctions of securities of that kind

Highlights

• The bid-to-cover ratio is the dollar amount of bids received in a Treasury security auction versus the amount sold.
• To acquire an accurate measure of demand, it's important to contrast an auction's bid-with cover ratio to the average of the previous 12 auctions.
• The bid-to-cover ratio is an indicator of the demand for Treasury securities; a high ratio is an indication of strong demand.