what is the implied rate 
the implied rate is the difference between the spot interest rate and the interest rate for the forward or futures delivery date understanding the implied ratethe implied interest rate gives investors a way to compare returns across investments and evaluate the risk and return characteristics of that particular security an implied interest rate can be calculated for any type of security that also has an option or futures contract for example if the current u s dollar deposit rate is 1 for spot and 1 5 in one year s time the implied rate is the difference of 0 5 alternatively if the spot price for a currency is 1 050 and the futures contract price is 1 1071 the difference of 5 71 is the implied interest rate in both of these examples the implied rate is positive which indicates that the market expects future borrowing rates to be higher than they are now to calculate the implied rate take the ratio of the forward price over the spot price raise that ratio to the power of 1 divided by the length of time until the expiration of the forward contract then subtract 1 