List of Financial Market Terms

TED Spread is the difference in prices in three-month futures contracts for U.S. Treasuries and three-month futures contracts for Eurodollars. The contract MUST have identical expiration months...very important. 

The TED Spread is primarily used to measure credit risk. A decreasing TED spread indicates a decreasing default risk, and vice versa.  This is a well known indicator, and can be found online or in any financial periodical.  

This 6 month chart of the TED spread should give you an idea of how it moves:

ted spread

Source: Bloomberg

Related terms: LIBOR OIS Spread, VIX, VIX Options

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