Interest Rate Futures Contracts 4 Finance Articles | August 17 Steven Stamkos Canada Jersey , 2010
The margin on a eurodollars contract is just around $1,000. Because the contract size is $1,000,000, this represents 11,000 Sidney Crosby Canada Jersey , or a tenth of one percent. This is amazingly small. Eurodollar contracts e...

The margin on a eurodollars contract is just around $1,000. Because the contract size is $1,000,000, this represents 11,000 Shea Weber Canada Jersey , or a tenth of one percent. This is amazingly small.

Eurodollar contracts expires in March, June, September and December. It's quoted in decimals, making it easier to read and understand. Usually it's five digits, with the final one on the right representing a fraction of a point. It may look like 98.550.

Prices for eurodollars contracts varies with inflation rates, Federal Reserve policies Ryan Getzlaf Canada Jersey , various political and economic events and policies.

They are quoted in terms of 100 - the yield of official British Bankers Association fixing of the 3-month LIBOR US dollar rate as of the settlement date.

In the financial crisis in the fall of 2008, eurodollars benefited from the flight to quality. When all financial instruments seemed to be at risk, people wanted their money in US dollars. That meant a huge demand in eurodollar securities, forcing the futures contracts higher.

Eurodollar securities are not quite as certain as T-bills issued by the United States, because they're held by private banks, and therefore there's some slight risk. However Roberto Luongo Canada Jersey , they are U.S. dollars, and so demand drove the contracts to high levels, approaching 100, indicating an extremely low yield.

In such cases, people are a lot more concerned about the return of their money than the return on their money, as Will Rogers once quipped. They received almost no interest Rick Nash Canada Jersey , but their principle was safe. That certainly wasn't the case for stocks.

CME eurodollar futures contracts are often used to hedge interest rate swaps. They serve as a benchmark for corporate financing. The Chicago Mercantile Exchange instituted