Range Floater

A deposit or Note that accrues interest daily when the underlying reference point is within a predefined range and accrues zero when outside that range. In general, Range Floaters are principal guaranteed so the investor is assured of at least receiving the principal back. By their nature, Range Floaters are ideal where the market is expected to move sideways, i.e. stay range bound. Range Floaters can be designed with any underlying reference including interest rates and FX rates. Range Floaters are also known as Fairway Bonds or Fairway Floaters and Daily Range Accruals.