daystomaturity

Days to maturity (DTM) is a financial metric that measures the number of calendar days remaining until a security’s stated maturity date. It is commonly used for fixed-income instruments such as bonds, notes, treasury bills, and certificates of deposit, as well as certain structured products. DTM helps investors gauge how much time remains for principal repayment, interest accrual, and the evolution of price sensitivity and yields.

Calculation of DTM typically involves subtracting the valuation date from the instrument’s maturity date and expressing the result in days. The exact count can depend on the day count convention used for interest accrual and yield calculations. Common conventions include Actual/Actual, Actual/360, and 30/360, and some methods treat weekends and holidays differently. The convention chosen affects accrued interest and the calculation of yield.

DTM has practical implications for pricing, risk, and cash management. As DTM shortens, an instrument’s price tends to move toward its par value and its yield profile can change to reflect near-term cash flows. Longer DTM generally implies greater sensitivity to interest-rate changes, while shorter DTM reduces duration but increases exposure to near-term events such as calls or redemptions. In derivatives, the related concept of days to expiration is critical for option pricing and time value. DTM is also used in portfolio risk assessments and liquidity planning.

Limitations should be noted: DTM alone does not determine suitability. It should be considered alongside yield, coupon, credit risk, liquidity, and the instrument’s overall structure.