Investor Glossary-ted spreadInvestor Glossary-ted spreadInvestor Glossary-ted spreadInvestor Glossary-ted spreadInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

TED Spread

The HTML to link to this page
 

A TED spread is a yield spread. On any given day, the TED spread represents the difference between the interest rate of a three-month US Treasury Bill (i.e. "T" in TED spread) and the settlement value of a three-month Eurodollar future (i.e. "ED" in TED spread). TED spread is simply calculated as the difference between the three-month US Treasury Bill and three-month LIBOR (i.e. London Inter Bank Offered Rate). A spiking TED spread suggests increasing counterparty risk in the financial markets. When inter-bank lenders are concerned about potential defaults by other banks, the LIBOR increases causing the TED spread to increase as well. For example, during the banking crisis in 2008, the TED spread shot up to more than 450 basis points. Prior to the crisis, the TED spread tended to stay between 20 to 60 basis points. The TED spread is expressed in basis points (i.e. bps). A TED spread of 100 basis points for example means that there is a 1% difference between the three-month T-Bill and three-month LIBOR.



Rate this TED Spread definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: in escrow, balance sheet, current ratio, implied volatility, ex-dividend, APR, open position, reverse mortgage, deferred revenue, real GDP, wholly-owned subsidiary, inflation, Zero Cost Collar, Key Rate Duration, average price per share, VIX, limit order, labor relations, command economy, quality assurance, LIBOR, debt service coverage, FTSE, phantom income, 1031 exchange, ex-dividend date, per diem, stock split, stock market close, minority interest, cancelled check, covered put, dividends payable, 1035 exchange, class C shares, diluted share, required rate of return, margin rate, retained earnings, EBITDA, FICO score, 144a, deferred tax, risk management, option premium, annual return, 401a, irrevocable trust, liquidity ratio


Investor Glossary | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
Investor Glossary Index >>> # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
©2004-2014 Investor Glossary - All rights reserved - Terms of Use