On-the-run Treasuries are the most currently issued Treasury bonds or notes.

It is the most commonly traded form of a Treasury note of a specific maturity. The on-the-run Treasury is significantly more liquid than other forms of securities. Therefore, they tend to trade at a premium.

Off-the-run Treasuries refer to debt instruments issued by the US Treasury that are not the latest offering.

Long Term Capital Management (LTCM), a hedge fund that was making its profit by trading this spread was incredibly successful before it imploded and almost took down the financial system along with it.

There are opportunities for arbitrage in the market, but don't average down when the market direction is against you. You may be right eventually but your position may go bust before the market reverts back to its normalcy.