STIR Futures & Options

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DEFINITION of 'STIR Futures & Options'

An acronym standing for "short-term interest rate" options or futures contract.

INVESTOPEDIA EXPLAINS 'STIR Futures & Options'

Many companies and financial institutions use STIR contracts to hedge against borrowing or lending exposure.

RELATED TERMS
  1. Clearing House

    An agency or separate corporation of a futures exchange responsible ...
  2. Option

    A financial derivative that represents a contract sold by one ...
  3. Interest Rate

    The amount charged, expressed as a percentage of principal, by ...
  4. Hedge

    Making an investment to reduce the risk of adverse price movements ...
  5. Strike Width

    The difference between the strike price of an option and the ...
  6. Inverse Transaction

    A transaction that can cancel out a forward contract that has ...
RELATED FAQS
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  2. In what market situations might a short put be a profitable trade?

    Short puts would be a profitable trade in low-volatility bull markets or range-bound markets. Selling puts is a strategy ... Read Full Answer >>
  3. What is the relationship between implied volatility and the volatility skew?

    The volatility skew refers to the shape of implied volatilities for options graphed across the range of strike prices for ... Read Full Answer >>
  4. How are commodity spot prices different than futures prices?

    Commodity spot prices and futures prices are different quotes for different types of contracts. The spot price is the current ... Read Full Answer >>
  5. How do commodity spot prices indicate future price movements?

    Commodity spot prices indicate future price movements because commodity futures prices are calculated using spot prices. ... Read Full Answer >>
  6. How is a short call used in a collar option strategy?

    An investor uses a short call sold above the current market price to collect a premium in a collar option strategy. The core ... Read Full Answer >>
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