LIBOR Definition

LIBOR, the London Interbank Offered Rate, was a benchmark interest rate at which major banks historically lent to one another.

What is LIBOR?

LIBOR was widely used to price loans, derivatives, and other financial products across global markets.

It has largely been phased out and replaced by alternative reference rates such as SOFR in many markets.

A loan historically priced at LIBOR plus 2% would move in line with changes in the LIBOR benchmark.

Leverage allows traders to control a larger position size using a smaller amount of capital.

A liability is a financial obligation or debt owed by an individual or company to another party.

A limit order is an instruction to buy or sell an asset at a specified price or better.