Fixing: Difference between revisions
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imported>Doug Williamson (Add fourth and fifth definitions.) |
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1. The setting of an interest rate for a predetermined future period. For example, the periodic re-setting of the interest rate on a floating rate loan. | 1. | ||
The setting of an interest rate for a predetermined future period. | |||
For example, the periodic re-setting of the interest rate on a floating rate loan. | |||
2. | |||
The legitimate setting of any market price or rate, for a standard period, often a day. | |||
:"Deutsche Bundesbank ensures liquidity of [German] government securities by making a market at the exchange... At the stock exchange, there is a regular price fixing per day for less liquid bond issues and continuous trading for more liquid issues." | |||
:''The Treasurer's Wiki, Germany'' | |||
3. | |||
The use of derivative instruments such as Forward rate agreements (FRAs) for hedging purposes, to effectively fix a hedged rate. | |||
4. | |||
A fixing instrument (or fixing derivative) is one which hedges an exposure by effectively fixing a hedged rate for it. | |||
Contrasted with an insurance-type instrument, such as an option. | |||
5. | |||
Price fixing is an agreement or collusion to manipulate a market for the advantage of those participating in the agreement, usually harming other market participants. | |||
This is illegal in almost all jurisdictions and markets. | |||
== See also == | == See also == | ||
* [[Antitrust law]] | |||
* [[Cartel]] | |||
* [[Competition policy]] | |||
* [[Fixing instrument]] | * [[Fixing instrument]] | ||
* [[Forward rate agreement]] | * [[Forward rate agreement]] | ||
* [[Germany]] | |||
* [[Hedging]] | |||
* [[Option]] | * [[Option]] | ||
* [[Rate fixing]] | |||
* [[Risk response]] | |||
* [[Transfer]] | |||
[[Category:The_business_context]] | |||
[[Category:Manage_risks]] | |||
[[Category:Cash_management]] | |||
[[Category:Financial_products_and_markets]] | |||
[[Category:Liquidity_management]] | |||
Latest revision as of 20:33, 27 August 2019
1.
The setting of an interest rate for a predetermined future period.
For example, the periodic re-setting of the interest rate on a floating rate loan.
2.
The legitimate setting of any market price or rate, for a standard period, often a day.
- "Deutsche Bundesbank ensures liquidity of [German] government securities by making a market at the exchange... At the stock exchange, there is a regular price fixing per day for less liquid bond issues and continuous trading for more liquid issues."
- The Treasurer's Wiki, Germany
3.
The use of derivative instruments such as Forward rate agreements (FRAs) for hedging purposes, to effectively fix a hedged rate.
4.
A fixing instrument (or fixing derivative) is one which hedges an exposure by effectively fixing a hedged rate for it.
Contrasted with an insurance-type instrument, such as an option.
5.
Price fixing is an agreement or collusion to manipulate a market for the advantage of those participating in the agreement, usually harming other market participants.
This is illegal in almost all jurisdictions and markets.
