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IR Forward Rate Agreement

Trade Type: ForwardRateAgreement
Trade Components: None

A Forward Rate Agreement is a contract between two counterparties that determines a fixed forward interest rate benchmarked to a reference IBOR index rate and tenor.
The difference between the fixed forward rate (the strike) and the reference rate is to be paid/received at the end of the contract. Interest is accrued on a predetermined notional amount from an agreed upon start date to the end of the FRA contract.
There are no exchanges of notional.

This example is a forward rate agreement with the 6M EUR Euribor Index as reference and a fixed forward strike rate of 0.5%.