<p>No. The auction uses the highest <em>yield</em>, which means the lowest <em>price</em> (for the same coupon). That is, for bonds, price up -> yield down (and vice versa). (The only tricky bit is that the coupon is not known until the auction concludes.)</p>

<p>For a discussion of U.S. Treasury bond structure: <a href="https://www.treasurydirect.gov/instit/research/faqs/faqs_auct.htm" rel="nofollow noreferrer">link to TreasuryDirect.</a></p>

<p>Not all bonds are issued via an auction process (one alternative is “tapping” issues). Sweden is an example of using a multi-price auction - <a href="https://www.riksgalden.se/en/For-investors/policy_regulations/Policy-and-sales/Auction-procedure/" rel="nofollow noreferrer">link to Swedish auction description.</a></p>

CC BY-SA 3.0
2018-02-17T18:10:54.060Z
"We have for many years used closed multiple-price auctions (also called price-discriminative auctions)." 
https://www.riksgalden.se/en/For-investors/policy_regulations/Policy-and-sales/Auction-procedure/
Giskard
CC BY-SA 3.0
2018-02-17T18:05:25.637Z
2018-02-17T19:28:31.713Z
2018-02-17T19:28:31.713Z
Brian Romanchuk
<p>In US treasury auction (for bonds and notes), my understanding is that the highest bidder's price (and rate) is applied for all the buyers. </p>

<p>Assume a buyer 'A' who plans to buy a smaller number of bond shares. Let two other players 'B' and 'C' invest heavily compared to 'A. Let 'B' and 'C' be competitors of 'A'.</p>

<p>Is it possible for 'A' to invest low but bid high thus play spoilsport for 'B' and 'C'?  </p>

CC BY-SA 3.0
2018-02-17T15:32:07.730Z
Different countries have different types of treasury auctions. Please clarify the exact auction you are talking about.
Giskard
CC BY-SA 3.0
2018-02-17T15:52:33.717Z
I meant the US gov treasury auction for bonds and notes.
Kannan
CC BY-SA 3.0
2018-02-17T16:03:05.873Z
I edited the question with specific auction details.
Kannan
<bonds><auctions>
In US gov treasury auction, can the highest bidder force high prices for all others
Kannan
# In US gov treasury auction, can the highest bidder force high prices for all others

(Asked by: username_0 on 2018-02-17)

In US treasury auction (for bonds and notes), my understanding is that the highest bidder's price (and rate) is applied for all the buyers.

Assume a buyer 'A' who plans to buy a smaller number of bond shares. Let two other players 'B' and 'C' invest heavily compared to 'A. Let 'B' and 'C' be competitors of 'A'.

Is it possible for 'A' to invest low but bid high thus play spoilsport for 'B' and 'C'?

**Tags:** bonds, auctions
> **Comments:**
> **username_1**: Different countries have different types of treasury auctions. Please clarify the exact auction you are talking about.  
> **username_0**: I meant the US gov treasury auction for bonds and notes.  
> **username_0**: I edited the question with specific auction details.  

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## 1 answers

### Answer by username_2 on 2018-02-17. Score: 2

No. The auction uses the highest *yield*, which means the lowest *price* (for the same coupon). That is, for bonds, price up -> yield down (and vice versa). (The only tricky bit is that the coupon is not known until the auction concludes.)

For a discussion of U.S. Treasury bond structure: [link to TreasuryDirect.](https://www.treasurydirect.gov/instit/research/faqs/faqs_auct.htm)

Not all bonds are issued via an auction process (one alternative is “tapping” issues). Sweden is an example of using a multi-price auction - [link to Swedish auction description.](https://www.riksgalden.se/en/For-investors/policy_regulations/Policy-and-sales/Auction-procedure/)

> **Comments:**
> **username_1**: "We have for many years used closed multiple-price auctions (also called price-discriminative auctions)."  https://www.riksgalden.se/en/For-investors/policy_regulations/Policy-and-sales/Auction-procedure/  

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