This is a draft, shown for review before publication.
A lockout is a convention for compounding in arrears that repeats the overnight rate of a day a number of business days before the end of the interest period for the remaining days of the period. Because the rate is known before the end of the period, the interest payment can be prepared.
The day whose rate is repeated is called the cut-off date, and the period in which that rate is used is also called the suspension period.
If rates rise or fall during the lockout, the move is not reflected in the interest. For both the borrower and the lender, this can result in a gain or a loss.