Skillsfirst Level 3 Certificate in Introduction to Financial Trading (RQF) - UNIT 1: Principles of financial trading
Skillsfirst Level 3 Certificate in Introduction to Financial Trading (RQF) - UNIT 2: Principles of Financial Planning and Cash Flow in Financial Trading
Skillsfirst Level 3 Certificate in Introduction to Financial Trading (RQF) - UNIT 3: Understanding financial trading techniques

WHAT IS THE STIRS MARKET?

STIRS stands for short term interest rates, which is interest rate on loans or debt instruments having maturities of less than three years. The short-term interest rates generally refer to three-month interbank offer rate attached to loans given and taken amongst banks for any excess or shortage of liquidity over several months or the rate associated with Treasury bills.

STIRS as derivatives products, derive from the underlying cash money markets.

Wholesale Cash Money Markets

Each country’s own domestic money market is an over the counter (OTC) wholesale market trading in two main areas:

  • Unsecured Cash – Interbank, or Depo markets (STIRS are closely related to Depo)
  • Secured Cash – Treasury Bills, Certificates of Deposits (CDs), Commercial Paper (CP) Bankers acceptances (BAs), Floating Rate Notes (FRNs), sale and repurchase agreement (Repo’s)

Collectively these are known as ‘cash’ markets because real sums of money will actually be debited and credited to respective accounts. Although there are no official definitions as to what constitutes a money market, the majority of all financial instruments will have a maturity of one year, or less.

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