Australian 90 Day Bank Bill
What are Australian 90 Day Bank Bills?
The Australian 90 Day Bank Bill futures rate is an Australian benchmark indicator for short term interest rates. The Australian 90 Day Bank Bill contracts are effective tools for enhancing portfolio performance, reducing and managing risk and also for trading.
Uses of Australian 90 Day Bank Bills
A Bank Bill refers to a money market investment instrument, offered for a reasonably short time frame until maturity that usually ranges between 30 to 180 days. A 90 Day Bank Bill will normally be purchased by an investor at a discount to its expected value when it matures and as such making a profit.
Risks of Australian 90 Day Bank Bills
The risk involved in Bank Bills lie within the credit worthiness of the bank involved. Like New Zealand, Australia has four ‘big banks’, Commonwealth Bank of Australia (CBA), Australian and New Zealand Banking Group (ANZ), National Australia Bank (NAB) and Westpac Banking Corporation (WBC). If traded outright, the risks are simply that the position will move against the expected direction the trader predicts.