What is the Full form of IROs? IROs Meaning and Definition
IROs Full Form – Interest Rate Options or IROs is a derivative whose value is based on interest rate. A derivative is a financial contract which derives its value from the performance of a value named underlying entity. The undertaking entity can be a value of an asset or an index. In this case, the value of the underlying entity, or simply underlying is based on the interest rate. The main reason why people take IROs is that people can benefit from the changes in the interest rates. IROs are similar to equity options in one way – they can be divided into the same divisions i.e. calls and pulls. A call gives the holder profit when the interest rates go up, but a pull gives the holder profit when the interest rates go down. The exchanges of IROs are monitored and facilitated by an American Central Exchange named CME Group.