Fixing

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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.


2.

The use of derivative instruments such as Forward rate agreements (FRAs) for hedging purposes, to effectively fix a hedged rate.


3.

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.


See also