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On the difference between FRA and interest rate swap
The difference is that FRA is not traded on a standardized exchange, but both parties sign an agreement off-site. Therefore, the forward interest rate agreement can be regarded as a form of over-the-counter trading of interest rate futures.

1. Forward Interest Rate Agreement (FRA) is a forward contract. The buyer and the seller agree on the agreed interest rate for a certain period in the future and specify a reference interest rate. On the future settlement date, one party shall pay the other party the discount interest on the difference between the agreed interest rate and the reference interest rate at that time according to the specified period and principal amount.

2. Interest rate futures are a kind of financial futures with short-term, medium-term and deliverable financial certificates as the target.

3. The forward interest rate agreement is traded in the OTC market, with unlimited transaction amount and delivery date, which is flexible and simple. Intra-exchange trading of interest rate futures, standardized contract trading.

4. Transaction form: The forward interest rate agreement is traded in the OTC market, with unlimited transaction amount and delivery date, which is flexible and simple. Interest rate futures trading is floor trading and standardized contract trading.

Verb (abbreviation of verb) credit risk: both parties to the forward interest rate agreement have credit risk, and the interest rate futures risk is minimal.

6. Cash flow before delivery. There is no cash flow in the forward interest rate agreement, and there is net cash flow in the daily margin account of interest rate futures.

7. Applicable currencies: all convertible currencies in the forward interest rate agreement and the currencies specified in the interest rate futures exchange.

8. Interest rate swap refers to the exchange of fixed interest rate and floating interest rate between two funds with the same currency, the same debt amount (principal) and the same term. It refers to the exchange of interest income (expenditure) generated by one nominal principal with interest income (expenditure) generated by the other party at another interest rate, and only the interest with different characteristics is exchanged, not the real principal. Interest rate swap can take many forms, and the most common interest rate swap is to convert between fixed interest rate and floating interest rate.