Interest rates are a market like any other. So if you want to
trade on the movements of UK interest rates - perhaps to hedge your
mortgage payments, for instance - you can bet on the ‘Short
Sterling’ future. This is a market listed by the LIFFE and based on
the British Bankers Association London Interbank Offered Rate (BBA
LIBOR) at 11.am on the last trading day of the contract.
For example, the MAR 04 Short Sterling
might be quoted as 97.000, implying that the market forecast for
LIBOR on the 3rd Wednesday in March 2004 is 100-97=3%.
Other markets include:
- Euribor
- Euro dollar
- Euro Swiss
- Short Sterling
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