Now you can trade Eurodollar futures at optionsXpress! Open an account to trade futures at optionsXpress. Financial futures have grown explosively since being introduced strategies the Chicago Mercantile Exchange CME in What is the single largest segment of the growth? CME interest rate products, particularly Eurodollar futures. Launched on December 9,Eurodollar futures have evolved into one of the world's most popular and innovative contracts, with flexibility and adaptability that are unsurpassed. The Contracts' exceptional growth has fostered nonstop enhancements, resulting in a Eurodollar complex today that bears little resemblance strategies that of only several years ago. Eurodollars are simply U. The Eurodollar market has burgeoned over the past 30 years, as the Dollar has become the world's dominant currency for global trade and finance. Eurodollar deposits play a major role in the international capital market. The interbank market for immediate spot and forward delivery of offshore Dollars is deep and liquid, giving banks the ability to fund Dollar loans to foreign importers without incurring currency exchange risks. Eurodollar deposits are direct obligations of the commercial banks accepting the deposits. They are not guaranteed by any government. Although they represent low-risk investments, Eurodollar deposits are not totally risk-free. Interest rates, which can be loosely defined as the price of money, affect the livelihoods of individuals and businesses each and every day. The cost of a home mortgage, the finance charge applied to a credit card balance, the amount of interest received on a savings account or the options on a corporate bond issue are all examples of the interest rates that influence our personal and commercial activities. Like all goods and services, interest rates are determined by the market forces strategies supply eurodollar demand. However, the federal government also can influence key interest rates via monetary policy, by adjusting rates upward or downward to slow or stimulate the economy. Interest rate levels often are regarded as key indicators of a country's economic health. The money market comprises the markets for short-term, heavily traded credit instruments with maturities of less than one year. Money market instruments include Treasury bills, commercial paper, bankers' acceptances, negotiable certificates of deposit, Federal Funds, and short-term collateralized loans. While the markets for these various instruments are distinct, their respective interest rates reflect general credit conditions with adjustments for differences in risk and liquidity. As the money markets have become more liquid, money managers borrow and lend in whichever markets offer a price advantage. No longer willing to leave balances as unproductive, non-interest-earning deposits, corporations today are making more aggressive use of cash strategies techniques. Cash market participants primarily use CME's interest rate eurodollar for pricing and hedging their money market positions. CME interest rate futures contracts are traded using a price index, which is derived by subtracting the futures' interest rate from For instance, an interest rate of 5. Given this price index construction, if interest rates rise, the price of the contract falls and vice versa. Therefore, to profit from declining interest rates, you would buy the futures contract go long ; to profit from a rise of interest eurodollar, you would sell the contract go short. In either case, if your view turns out to be correct, you will be able to liquidate or offset your original position and realize a gain. If you are wrong, however, your trade will result in a loss. Minimum Tick Size and Value: Eurodollar futures trade electronically virtually around-the-clock on the CME's Globex system, from 6: Principal trading months for Eurodollar futures are March, June, September, and December. Following the expiration of a quarterly Eurodollar futures contract, a fortieth options quarterly contract becomes available to trade the following business day. Please see the disclosures page for options information regarding this section. Didn't find what you needed? Content and tools are provided eurodollar educational and informational purposes only. Any stock, options, or futures symbols displayed are for illustrative purposes only and are not intended to portray a recommendation to buy or sell a particular security. Products and services intended for U. Online trading has inherent risk. System response and access times that may vary due to market conditions, system performance, volume and other factors. Options and futures involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options and Risk Disclosure Statement for Futures and Options strategies our website, prior to applying for an account, also available by calling eurodollar An investor should understand these and additional risks before trading. Multiple leg options strategies will involve multiple commissions. Member SIPC "Schwab" and optionsXpress, Inc. Deposit and lending products and services are options by Charles Schwab Bank, Member FDIC and an Equal Housing Lender "Schwab Bank". Short-Term Interest Rates - An Overview Interest rates, which can be loosely defined as the price of money, affect the options of individuals and businesses each and every day. Trade Eurodollar and other Interest Rate Futures with optionsXpress optionsXpress offers trading in Eurodollar futures at the CME. CME Eurodollar Futures Specifications Eurodollar futures, Chicago Mercantile Exchange, ED.
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