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STIR Future
An interest rate future is a financial derivative (a futures contract) with an interest-bearing instrument as the underlying asset. It is a particular type of interest rate derivative. Examples include Treasury-bill futures, Treasury-bond futures and Eurodollar futures. The global market for exchange-traded interest rate futures is notionally valued by the Bank for International Settlements at $34,771 billion in Dec 2019. Uses Interest rate futures are used to hedge against the risk that interest rates will move in an adverse direction, causing a cost to the company. For example, borrowers face the risk of interest rates rising. Futures use the inverse relationship between interest rates and bond prices to hedge against the risk of rising interest rates. A borrower will enter to sell a future today. Then if interest rates rise in the future, the value of the future will fall (as it is linked to the underlying asset, bond prices), and hence a profit can be made when closing out ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Financial Derivative
In finance, a derivative is a contract that ''derives'' its value from the performance of an underlying entity. This underlying entity can be an asset, index, or interest rate, and is often simply called the "underlying". Derivatives can be used for a number of purposes, including insuring against price movements ( hedging), increasing exposure to price movements for speculation, or getting access to otherwise hard-to-trade assets or markets. Some of the more common derivatives include forwards, futures, options, swaps, and variations of these such as synthetic collateralized debt obligations and credit default swaps. Most derivatives are traded over-the-counter (off-exchange) or on an exchange such as the Chicago Mercantile Exchange, while most insurance contracts have developed into a separate industry. In the United States, after the financial crisis of 2007–2009, there has been increased pressure to move derivatives to trade on exchanges. Derivatives are one of the ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Swiss Franc
The Swiss franc is the currency and legal tender of Switzerland and Liechtenstein. It is also legal tender in the Italian exclave of Campione d'Italia which is surrounded by Swiss territory. The Swiss National Bank (SNB) issues banknotes and the federal mint Swissmint issues coins. In its polyglot environment, it is often simply referred as german: Franken, french: franc, it, franco and rm, franc. It is also designated through signes: ''Fr'' Some fonts render the currency sign character "₣" (unicodebr>U+20A3 as ligatured Fr, following the German language convention for the Swiss Franc. However, most fonts render the character as F with a strikethrough on the lower left, which is the unofficial sign of French Franc. (in German language), ''fr.'' (in French, Italian, Romansh languages), as well as in any other language, or internationally as ''CHF'' which stands for ''.'' This acronym also serves as eponymous ISO 4217 code of the currency, CHF being used by banks and financial ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Hedge (finance)
A hedge is an investment position intended to offset potential losses or gains that may be incurred by a companion investment. A hedge can be constructed from many types of financial instruments, including stocks, exchange-traded funds, insurance, forward contracts, swaps, options, gambles, many types of over-the-counter and derivative products, and futures contracts. Public futures markets were established in the 19th century to allow transparent, standardized, and efficient hedging of agricultural commodity prices; they have since expanded to include futures contracts for hedging the values of energy, precious metals, foreign currency, and interest rate fluctuations. Etymology Hedging is the practice of taking a position in one market to offset and balance against the risk adopted by assuming a position in a contrary or opposing market or investment. The word hedge is from Old English ''hecg'', originally any fence, living or artificial. The first known use of the word ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Bond (finance)
In finance, a bond is a type of security under which the issuer ( debtor) owes the holder ( creditor) a debt, and is obliged – depending on the terms – to repay the principal (i.e. amount borrowed) of the bond at the maturity date as well as interest (called the coupon) over a specified amount of time. The interest is usually payable at fixed intervals: semiannual, annual, and less often at other periods. Thus, a bond is a form of loan or IOU. Bonds provide the borrower with external funds to finance long-term investments or, in the case of government bonds, to finance current expenditure. Bonds and stocks are both securities, but the major difference between the two is that (capital) stockholders have an equity stake in a company (i.e. they are owners), whereas bondholders have a creditor stake in a company (i.e. they are lenders). As creditors, bondholders have priority over stockholders. This means they will be repaid in advance of stockholders, but will rank behind s ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
British Bankers Association
The British Bankers' Association (BBA) was a trade association for the UK banking and financial services sector. From 1 July 2017, it was merged into UK Finance. It represented members from a wide range of banking and financial services. The association lobbied for its members and gave its view on the legislative and regulatory system for banking in the UK. Role The BBA described itself as the leading trade association for the UK banking sector with more than 230 member banks headquartered in over 50 countries with operations in 180 jurisdictions worldwide. Structure The BBA was a trade association owned and governed by its members. BBA board The board was the governing body of the Association. It agreed major strategies and policies. Member segment advisory boards Member segment advisory boards provided a forum to inform the agenda of the BBA board and policy committees. There was a member segment advisory board for the major retail banks, challenger banks, small banks, major ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Basis Point
A basis point (often abbreviated as bp, often pronounced as "bip" or "beep") is one hundredth of 1 percentage point. The related term ''permyriad'' means one hundredth of 1 percent. Changes of interest rates are often stated in basis points. If an interest rate of 10% increased by 1 bp, it changed to 10.01%. Definition :1 basis point (bp) = (a difference of) 1‱ or 0.01% or 0.1‰ or 10−4 or or 0.0001. :10 bp = (a difference of) 0.1% or 1‰ or 10‱. :100 bp = (a difference of) 1% or 10‰ or 100‱. Basis points are used as a convenient unit of measurement in contexts where percentage differences of less than 1% are discussed. The most common example is interest rates, where differences in interest rates of less than 1% per year are usually meaningful to talk about. For example, a difference of 0.10 percentage points is equivalent to a change of 10 basis points (e.g., a 4.67% rate increases by 10 basis points to 4.77%). In other words, an increase of 100 basis points mean ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Commodity Tick
Futures exchanges establish a minimum amount that the price of a commodity can fluctuate upward or downward. This minimum fluctuation (trade increment) is known as a tick or commodity tick. Hence, a tick is any fluctuation in the price of a security. Each futures contract has a different size, quantity, valuation etc., so each tick size that can be applied to any one futures contract, is dependent on the previous variables. Tick size is important as it determines the possible prices available. For example, each "tick" for the grain market (soybeans, corn and wheat) is 0.25 cents per bushel, on one 5,000-bushel futures contract. See also *Percentage in point (PIP) *Tick size *NASDAQ futures NASDAQ futures are financial futures which launched on June 21, 1999. It is the financial contract futures that allow an investor to hedge with or speculate on the future value of various components of the NASDAQ market index. Several futures inst ... References External linksFutures Contra ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Settlement (finance)
Settlement is the "final step in the transfer of ownership involving the physical exchange of securities or payment". After settlement, the obligations of all the parties have been discharged and the transaction is considered complete. In the context of securities, settlement involves their delivery to the beneficiary, usually against ( in simultaneous exchange for) payment of money, to fulfill contractual obligations, such as those arising under securities trades. Nowadays, settlement typically takes place in a central securities depository. In the United States, the settlement date for marketable stocks is usually 2 business days or T+2 after the trade is executed, and for listed options and government securities it is usually 1 day after the execution. In Europe, settlement date has also been adopted as 2 business days after the trade is executed. As part of performance on the delivery obligations entailed by the trade, settlement involves the delivery of securities and the cor ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Sydney Futures Exchange
Australian Securities Exchange Ltd or ASX, is an Australian public company that operates Australia's primary securities exchange, the Australian Securities Exchange (sometimes referred to outside of Australia as, or confused within Australia as, The Sydney Stock Exchange, a separate entity). The ASX was formed on 1 April 1987, through incorporation under legislation of the Australian Parliament as an amalgamation of the six state securities exchanges, and merged with the Sydney Futures Exchange in 2006. Today, ASX has an average daily turnover of A$4.685 billion and a market capitalisation of around A$1.6 trillion, making it one of the world's top 20 listed exchange groups. ASX Clear is the clearing house for all shares, structured products, warrants and ASX Equity Derivatives. Overview ASX Group is a market operator, clearing house and payments system facilitator. It also oversees compliance with its operating rules, promotes standards of corporate governance amo ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Tokyo Financial Exchange
is a futures exchange and established in April 1989 under the ''Financial Futures Trading Law'' of Japan. It principally deals in financial instrument markets that handles securities as well as market derivatives. History The Tokyo Financial Exchange (TFX) was established under the Financial Futures Trading Law of Japan in April 1989. The TFX was created to be an exchange of for financial originated products. That April, the TFX held a membership organization with the capital supplied by large financial institutions around the world. By June 1989, the Tokyo International Financial Futures Exchange (TIFFE) was trading on three-month Euroyen futures, three-month Eurodollar futures, and Japanese Yen-US Dollar currency futures. By April 2004, the TFX was demutualized and integrated to support corporate power, and the Financial Futures Trading Law was abolished. In lieu, the Financial Instruments and Exchange Law was revised and the Securities and Exchange Law was enacted in Septemb ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Chicago Board Of Trade
The Chicago Board of Trade (CBOT), established on April 3, 1848, is one of the world's oldest futures and options exchanges. On July 12, 2007, the CBOT merged with the Chicago Mercantile Exchange (CME) to form CME Group. CBOT and three other exchanges (CME, NYMEX, and COMEX) now operate as designated contract markets (DCM) of the CME Group. History The concerns of U.S. merchants to ensure that there were buyers and sellers for commodities have resulted in forward contracts to sell and buy commodities. Still, credit risk remained a serious problem. The CBOT took shape to provide a centralized location, where buyers and sellers can meet to negotiate and formalize forward contracts. An early 1848 discussion between Thomas Richmond and W. L. Whiting regarding the propriety of creating a board of trade led to the March 13 meeting merchants and businessmen in favor of establishing it and a resulting resolution for such an establishment and a Constitution. A committee then developed ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Chicago Mercantile Exchange
The Chicago Mercantile Exchange (CME) (often called "the Chicago Merc", or "the Merc") is a global derivatives marketplace based in Chicago and located at 20 S. Wacker Drive. The CME was founded in 1898 as the Chicago Butter and Egg Board, an agricultural commodities exchange. Originally, the exchange was a non-profit organization. The Merc demutualized in November 2000, went public in December 2002, and merged with the Chicago Board of Trade in July 2007 to become a designated contract market of the CME Group Inc., which operates both markets. The chairman and chief executive officer of CME Group is Terrence A. Duffy, Bryan Durkin is president. On August 18, 2008, shareholders approved a merger with the New York Mercantile Exchange (NYMEX) and COMEX. CME, CBOT, NYMEX, and COMEX are now markets owned by CME Group. After the merger, the value of the CME quadrupled in a two-year span, with a market cap of over $25 billion. Today, CME is the largest options and futures con ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
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