Where do eurodollar futures trade
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Eurodollar Futures | ICE
Eurodollars actually have nothing to do with Europe's currency. Eurodollars are interest bearing bank deposits denominated in US Dollars and held at banks outside of the United States. Since these bank deposits are held outside the U. Due to this, the higher level of risk to investors is reflected in higher interest rates.
Introduction To Trading Eurodollar Futures | Investopedia
The Eurodollar Futures contract started trading on the Chicago Mercantile Exchange CME in , marking the first cash settled futures contracts. When Eurodollar futures contracts expire, the seller of the contract can transfer the associated cash position rather than making delivery of the underlying asset. What do Eurodollar futures measure?
Eurodollar futures provide an effective means for companies and banks to secure an interest rate for money it plans to borrow or lend in the future.
The Eurodollar contract can be used to hedge against interest rate changes over multiple years into the future. If interest rates rise, Eurodollar futures decrease, and if interest rates fall, Eurodollar futures increase.
Here is a current chart of December Eurodollar futures: As you can see Eurodollars futures are currently trading around If expected eurodollar interest rates in December were to rise to 3. As an interest rate product, the policy decisions of the US Federal Reserve have a major impact on the price of Eurodollar futures. Trading Eurodollar futures can be quite volatile around FOMC meetings and announcements.
Futures & Options Trading for Risk Management - CME Group
A long-term change in Fed policy towards raising interest rates would lead to Eurodollar futures declining steadily over the long-term making it a good trade for trend followers. Past performance is not indicative of future results.
Futures trading involves substantial risk of loss and may not be suitable for everyone. Please consult an aiSource advisor prior to opening any managed futures accounts. Get the latest reports in managed futures, straight from the Source. Enter your email and get the news.
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Past performance is not necessarily indicative of future results. Trading commodity futures, options, and foreign exchange "forex" involves substantial risk of loss and is not suitable for all investors.
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