What Is an Interchange? An interchange is the transfer of digital information from one computer to another. In business, this typically refers to an electronic data interchange (EDI), a system used to communicate strictly formatted messages that represent documents other than monetary instruments. An interchange should not be confused with the interchange rate, or “swipe fees,”
What Is an Interchange Rate? The term interchange rate refers to a fee that a merchant must pay with every credit and debit card transaction. Rates are set by payment card issuing companies in exchange for accepting the credit risk and handling charges inherent in these transactions. Interchange rates are set by financial companies and
What Is an Intercommodity Spread? An intercommodity spread is a sophisticated options trade that attempts to take advantage of the value differential between two or more related commodities, such as crude oil and heating oil, or corn and wheat. A commodity is a necessary good used in commerce that is interchangeable with other commodities of the
What Is an Intercompany Products Suits Exclusion? An intercompany products suits exclusion is an insurance policy endorsement that excludes coverage for claims made by one named insured against another named insured. Intercompany products suits exclusions are most commonly found in insurance policies purchased by companies with large operations, especially operations in which subsidiaries buy and sell
What Is the Intercontinental Exchange (ICE)? The Intercontinental Exchange (ICE) is an American company that owns and operates financial and commodity marketplaces and exchanges. It was founded in May 2000 in Atlanta, Georgia. ICE operations include futures exchanges, cash exchanges, central clearing houses, and market services for off-exchange trading. ICE operates futures exchanges in the
What Is an Inter-Dealer Broker (IDB)? An inter-dealer broker (IDB) is a specialized financial intermediary who facilitates transactions between investment banks, broker-dealers, and other large financial institutions. IDBs work with large blocks of securities where there is low trading volume or when clients seek anonymity on their orders. The inter-dealer broker often focuses on trades where
What Is an Interdealer Market? An interdealer market is a trading market that is typically accessible only by banks and financial institutions. It is an over-the-counter (OTC) market that is not restricted to a physical location, nor does it have a centralized exchange or market maker. Rather, it is a global market comprised of a
What Is Interest? Interest is the monetary charge for the privilege of borrowing money. Interest expense or revenue is often expressed as a dollar amount, while the interest rate used to calculate interest is typically expressed as an annual percentage rate (APR). Interest is the amount of money a lender or financial institution receives for
What Is the Interest Coverage Ratio? The interest coverage ratio is a debt and profitability ratio used to determine how easily a company can pay interest on its outstanding debt. The interest coverage ratio is calculated by dividing a company’s earnings before interest and taxes (EBIT) by its interest expense during a given period. The
What Are Interest-Crediting Methods? An interest-crediting method determines how interest changes to a fixed index annuity (FIA) are measured. The interest-crediting method chosen measures the amount of interest that the annuity holder can receive over a specific time period. Annuity contracts have a number of provisions that affect how interest is treated. Most contacts include a
