 Initially, the TED spread was the difference between the interest rates for three-month U.S. Treasuries contracts and the three-month Eurodollars contract as represented by the London Interbank Offered Rate (LIBOR).However, since the Chicago Mercantile Exchange dropped T-bill futures after the 1987 crash, the TED spread is now calculated as the difference between the three-month LIBOR and the three-month T-bill interest rate.The size of the spread is usually denominated in basis points (bps).