Overnight funding rates (LIBOR replacement)

Albaran · 2021-05-21T14:28:20+00:00

Hi there, I was wondering how the formula might change, because of LIBOR being ditched at the end of 2021, to calculate overnight funding? Or will IG ditch it sooner than that? Is it going to be replaced by Euribor, ESTR, Ameribor, SOFR, SONIA (according to the relevant underlying currency of the instrument), just to name a few ? In short, what will be the new formula to calculate it? cheers,

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05/21/2021 at 3:28 PM #170125 quote

Albaran
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Hi there,

I was wondering how the formula might change, because of LIBOR being ditched at the end of 2021, to calculate overnight funding? Or will IG ditch it sooner than that?

Is it going to be replaced by Euribor, ESTR, Ameribor, SOFR, SONIA (according to the relevant underlying currency of the instrument), just to name a few ?

In short, what will be the new formula to calculate it?

cheers,

05/22/2021 at 11:58 AM #170169 quote

TempusFugit
Participant

Veteran

For me the calculation of overnight costs are my biggest concern about trading with IG.

In other brokers I can see the % overnight costs that they use for each active in any moment before I operate, but for IG I asked them and they told me I cannot know the %rate in advance. For me this is similar to say they can charge whatever they want.

05/22/2021 at 12:42 PM #170170 quote

Albaran
Participant

Average

I use the following website to get an idea of the costs IG will calculate though I do suppose you use a similar website to forge your own idea :

https://www.global-rates.com/en/interest-rates/libor/libor.aspx

I’m also curious about what other trustworthy brokers you use?

05/22/2021 at 3:31 PM #170174 quote

TempusFugit
Participant

Veteran

I can be wrong but I think each type of active uses different reference rate… Forex:TomNext, Index:Euribor, Commodities: related to futures I think… I use forex, index and commodities cfds and I can´t be calculating for all those rates +/- admon fees, depending of several things, each day and check if they do it right… so as I said: “For me this is similar to say they can charge whatever they want” Maybe they do it right maybe not, who knows? me not

Albaran wrote:

I’m also curious about what other trustworthy brokers you use?

Trustworthy and brokers are not words I would use together. But similar to IG I can tell you that in CMC you can see the overnight rate in the information of each active. That I like from them
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Overnight funding rates (LIBOR replacement)

General Trading: Market Analysis & Manual Trading

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Albaran @albaran Participant

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This topic contains 3 replies,
has 2 voices, and was last updated by TempusFugit
5 years, 4 months ago.

Topic Details

Forum:	General Trading: Market Analysis & Manual Trading
Language:	English
Started:	05/21/2021
Status:	Active
Attachments:	No files