Anonymous ID: a86a28 Dec. 5, 2022, 9:22 a.m. No.17880370   🗄️.is 🔗kun

>>17880174

>$80 trillion

That's the NOTIONAL amount, not the actual cash tfr/liability amount.

 

E.g. A and B agree on an interest rate swap.

A agrees to give B the variable LIBOR rate, while B agrees to pay A a fixed 3%.

 

But what dollar amounts will be traded?

 

The actual cash that transfers depends on the NOTIONAL amount, so if the cash amount traded is $1 million, then the NOTIONAL amount is roughly 33 times bigger, or $33.3 million.

 

That $80 trillion includes all those notional amounts.