One-Month vs. Three-Month SOFR Futures: SR1 vs. SR3

Both contracts use SOFR, the overnight Treasury-repo benchmark published by the Federal Reserve Bank of New York. That shared benchmark is only the first field in a comparison. SR1 and SR3 have distinct named periods, calculation methods, termination rules, final-settlement rules, contract units, and price records.

Start by recording the exact product code and month-year. A label such as “SOFR future” is incomplete because it does not tell a reader whether the contract uses one delivery month or a Reference Quarter. SOFR futures price and implied rate explains how both products use an IMM Index price convention while defining the embedded rate differently.

This distinction is not a question of which product is universally better. It is a question of which documented contract record a screen, chart, or comparison actually describes.

CME's One-Month SOFR futures use the arithmetic average of daily SOFR during the contract delivery month. In this product, the named delivery month is a key part of the rate record. The final calculation uses the daily benchmark values applicable to that month under the current contract rule.

Daily observations do not mean every calendar day receives a newly published SOFR rate. The calculation applies the product's treatment for days without a new business-day publication. A reader should consult the current rule rather than fill missing days with a generic assumption or a value from another rate series.

SR1's 100-minus-R quote convention describes its defined delivery-month arithmetic-average rate. The convention does not turn an SR1 price into the same observation as an SR3 price, a cash SOFR fixing, or an EFFR future.

CME's Three-Month SOFR futures use daily SOFR compounded in arrears over a defined Reference Quarter. This is not a simple three-month arithmetic average and should not be reduced to a generic calendar-quarter rate. The Reference Quarter is bounded by the contract's rules, including quarterly IMM dates and the applicable day-count treatment.

The compounding method means the timing and treatment of daily observations are part of the record. A simple average copied from a chart cannot recreate the same contract-defined rate. Do not assume an SR3 contract equals three interchangeable SR1 contracts merely because the product names reference one and three months.

SOFR futures final settlement explains how the product-specific observation period becomes an official final cash-settlement record. That later event remains separate from a live quote.

An SR3 contract's name is tied to the month in which its Reference Quarter begins. It does not say that the contract's final settlement occurs in that same named month. CME's current materials describe the Reference Quarter as beginning on the third Wednesday of the named month and ending immediately before the third Wednesday of the later delivery month.

This naming rule makes a month code useful only when paired with the product definition. Futures contract month codes explains why a month letter identifies a product-specific label rather than a universal expiry calendar. Do not infer a final date from an old example, standard quarter label, or another product's lifecycle.

The near contract can also contain a growing share of published SOFR observations as its Reference Quarter proceeds. An unchanged label therefore does not mean an unchanged mix of realized and still-market-priced inputs.

SR1 and SR3 can both be quoted as 100 minus a contract-defined rate, but that similar format is not a sufficient comparison. Before describing a difference, save each product code, named month-year, reference-period start and end, calculation method, price field, timestamp, source, and current contract unit.

SOFR futures versus Fed Funds futures is the appropriate next guide when the question instead concerns SOFR versus EFFR or SR1 versus ZQ. It does not replace an SR1–SR3 comparison, because the benchmark family and the calculation window are separate questions.

This guide explains SOFR futures contract mechanics. It is not a recommendation to choose, trade, roll, hedge, or value an SR1 or SR3 position. Current exchange rules, benchmark publications, market data, and account conditions govern an actual transaction.