AMERIBOR® (American Interbank Offered Rate), disseminated by the American Financial Exchange, LLC (AFX), is a transparent, transactions-based interest rate benchmark that represents market-based borrowing costs. The AMERIBOR rate is calculated daily as the transaction volume-weighted average interest rate of the AMERIBOR overnight unsecured loans on AFX. AMERIBOR is based on actual market transactions, not estimates or submissions. Cboe Futures ExchangeSM, LLC (CFE) plans to launch futures on the AMERIBOR interest rate benchmark. AMERIBOR futures will be cash-settled and are designed to reflect the market expectations of either compounded daily annualized AMERIBOR interest or average simple daily annualized AMERIBOR interest.
Hedge Variable Overnight Funding Costs and Interest Rate Risk
AMERIBOR is an unsecured interest rate benchmark that may be more reflective of the interbank borrowing costs of medium-sized and regional financial institutions.
Optimize Asset-Liability Management or Assist in Loan Origination
U.S. banks and other financial institutions can use AMERIBOR futures to match assets and liabilities and hedge loans with a benchmark that may be more representative of actual borrowing costs.
Hedge Exposure to Interest Rate Derivatives
Proprietary traders can use AMERIBOR futures in connection with hedging to help mitigate the risk of other interest rate derivative holdings.
Execute Interest Rate Trading Strategies
Whether the strategy is a relative value trade against other interest rate derivatives or directional in nature, proprietary traders can use AMERIBOR futures in connection with the execution of their interest rate strategies.
AMERIBOR® is a registered trademark of Environmental Financial Products, LLC and is licensed for use by CFE in connection with the listing for trading by CFE of AMERIBOR futures.