Notional Principal

This Issue in United States

Concept of Notional Principal in Futures Trading

In this context of financial law, the following is a definition of Notional Principal: In an interest rate swap, forward rate agreement, or other derivative instrument, the amount or, in a currency swap, each of the amounts to which interest rates are applied in order to calculate periodic payment obligations. Also called the notional amount, the contract amount, the reference amount, and the currency amount.