NEW YORK (Reuters: CME Group Incorporated (NASDAQ:) stated Monday it will start futures trading on U.S. Treasury Bonds 20 year on March 7. This move is subject to regulatory review. It is designed to allow investors to better manage U.S. Treasury Curve exposure.

U.S. Treasury Department has reintroduced 20 year bonds in May 2020. Securities auction sizes were increased across various maturities to raise money to support record-breaking government borrowing at the time of COVID-19.

The total issuance of 20-year Treasury Bonds has exceeded $450 billion since 1986. This created demand from customers for new products that provide 20-year yield exposure.

Mirza stated that the introduction of futures contracts on U.S. Treasury’s 20-Year Bond responds to market demand for a hedging instrument at a moment when U.S. Treasury risk management is more critical than ever.

The 20-year bond option could increase the demand by allowing investors to better hedge their debt and speculate about its future yield.

According to the Treasury Department, it intends to decrease auction sizes for 7-year and 20 year bonds to better address demand and supply dynamics in Treasuries.

CME’s U.S. Treasury Bond Futures, 20 year in duration, will enable delivery of 20-year Treasury bonds of initial issue at delivery within 19 years and 2 months. The remaining term to maturity can be delivered at delivery at delivery at delivery at delivery not exceeding 20 years.

CME, Chicago’s Treasury Futures Exchange said that its current suite of options and Treasury futures grew by more than 15% in the past year to record levels of 4.5 million daily volumes.