To Be Announced (TBA) Trading

In the mortgage-backed securities market, most trades take place on a to-be- announced basis, which means that the purchaser does not know the actual pools being delivered to back the specific securities purchase until just prior to settlement. The buyer knows only that the pools meet Public Securities Association good delivery requirements. Trades made on a TBA basis are generally priced lower, i.e., to yield higher returns, than trades based on specific pools with known characteristics.

Glossary * T