What is short sterling?

Short Sterling is a future contract referenced to LIBOR for three months sterling deposits. More information can be found in other sections, such as historical data, charts and technical analysis.

What is Sonia 3months?

Three Month SONIA Index Futures Contract *is a cash settled future based on the interest rate on a three month sterling deposit.

What is short term interest rate trading?

From MarketsWiki. Short-term interest rates are the interest rates on loans or debt instruments such as Treasury bills, bank certificates of deposit or commercial paper, that have maturities of less than one year. Short term interest rate futures (STIR futures) are one of the largest financial markets in the world.

What is ice Sonia?

More opportunities to trade the sterling curve. SONIA futures are cash settled short-term interest rate (STIR) futures contracts, based on the average Sterling Overnight Index Average (SONIA). SONIA reflects bank and building societies’ overnight funding rates in the sterling unsecured market.

What are STIR futures?

A STIR Futures contract (“STIR Future”) is a cash settled derivative contract on a specified term interest rate paid on a notional deposit.

What is sterling future?

Derivatives markets allow traders to bet on the direction of many securities and even interest rates. The most straight forward way to do this, is using the Short Term Interest Rate (or STIR) future. This is also known as the ‘short sterling’ future. In essence, this facilitates bets on where interest rates will be.

What is the difference between LIBOR and SONIA?

Unlike LIBOR which is a forward-looking rate, SONIA is backwards-looking, reflecting interest rates that banks pay to borrow sterling overnight from other banks. The key differentiator from LIBOR is that SONIA is based on real market transaction data, and thus perceived to be ‘risk free’ and more robust.

How long is short term interest rate?

Short-term interest rates are generally averages of daily rates, measured as a percentage. Short-term interest rates are based on three-month money market rates where available. Typical standardised names are “money market rate” and “treasury bill rate”.

What is an example of a short term interest rate?

For example, your bank will charge you a lower interest rate on a $10,000 loan that you pay back within 6 months than on the same $10,000 loan but paid back in 5 years. Why is this? Well, think back to your two friends.

How is SONIA different from LIBOR?

What is SONIA and SOFR?

While SONIA is an unsecured rate determined by underlying interbank money market trades, SOFR is a secured rate underpinned by repo transactions. Basic SONIA and SOFR differ from interbank offered rates, such as LIBOR, which are available in different tenors (one-month, three-month, six-month, etc.).