Cheapest to Deliver (CTD)
Last reviewed: September 2, 2026
Cheapest to deliver (CTD) is the eligible bond or note that is economically most advantageous for the short side of a deliverable futures contract to deliver, after applying the contract's conversion-factor rules.
It is not simply the lowest-priced bond
Deliverable Treasury securities have different coupons, maturities and market prices. Conversion factors are used to make those securities more comparable for delivery. CTD analysis therefore looks at the full delivery economics, not just the cash price.
Why the CTD can change
Changes in interest rates, the yield curve, financing costs and relative bond prices can cause a different security to become cheapest to deliver.
Where the term is used
CTD is especially important in Treasury and other deliverable fixed-income futures. See the full Treasury futures and CTD guide for a plain-language explanation.
Sources and further reading
- CME Group U.S. Treasury Futures — contract and delivery information.