# SOFR

*Derivatives & Options — Finicade finance glossary*

SOFR is the Secured Overnight Financing Rate — the cost of borrowing cash overnight against US Treasuries, and LIBOR's replacement. It's built from actual repo transactions worth roughly a trillion dollars a day rather than from bank estimates, which makes it very hard to manipulate. The trade-off is that it's secured and backward-looking, so it carries no bank credit component and spikes when repo markets seize, as in September 2019.

**Also known as:** Secured Overnight Financing Rate, SOFR rate

**Related terms:** [LIBOR](https://finicade.com/glossary/libor), [Repo (Repurchase Agreement)](https://finicade.com/glossary/repo), [Overnight Index Swap (OIS)](https://finicade.com/glossary/overnight-index-swap), [Floating Rate Note](https://finicade.com/glossary/floating-rate-note), [Interest Rate Swap](https://finicade.com/glossary/interest-rate-swap)

**Taught in:** Quant Quest — Interest Rate Instruments II

Source: https://finicade.com/glossary/sofr