I assumed FT was just a receipt. Deposit, wait, collect interest, done.

That's not really what it is. FT is the right to redeem face value of a debt position at maturity, and lenders buy it at a discount to that face value first. The yield is just the gap between what they paid and what they'll get back. FT is a token, not a locked balance, so it can move before maturity instead of sitting untouched until redemption.

That changed how I read "fixed rate" here. It's not a number stapled to a position. It's a discount to par relationship that exists the second FT gets minted, and that relationship can be handed off before the position ever settles.

Here's the part I keep sitting with. A position bought right after minting and one bought a week before maturity aren't holding the same thing, even with identical face value. Time to maturity is baked into what changes hands.

Does anyone actually trade FT before maturity, or does it mostly just sit until redemption anyway?

#TermMax @TermMax