No one is talking about the $EURDOLLAR trade which is a highly probable trade to put on. If you think interest rates are going to near 0%, this will reflect it. The technicals also line up for me on this with a 4 to 1 Risk to Reward ratio.
Everyone is concerned with the stock market which can be a laggard in following the actual economy.
The price of EURODOLLARS futures reflects the interest rate offered on the U.S. Dollars denominated deposits held in banks outside the U.S.
Price reflects the market gauge of the 3-month U.S. Dollar LIBOR interest rate anticipated on the settlement date of the contract.
LIBOR is a benchmark for short term interest rates at which banks can borrow funds in the London Interbank Market. EURODOLLARS futures is a LIBOR based derivative, reflecting the LIBOR for a 3-month $1 MIllion offshore deposit.
Expressed numerically using 100 minus the implied 3-month U.S. Dollar LIBOR interest rate. $96.00 EURODOLLARS reflects an implied interest rate of 4%, or 100 minus 96. Price moves inverse to yield.
Everyone is concerned with the stock market which can be a laggard in following the actual economy.
The price of EURODOLLARS futures reflects the interest rate offered on the U.S. Dollars denominated deposits held in banks outside the U.S.
Price reflects the market gauge of the 3-month U.S. Dollar LIBOR interest rate anticipated on the settlement date of the contract.
LIBOR is a benchmark for short term interest rates at which banks can borrow funds in the London Interbank Market. EURODOLLARS futures is a LIBOR based derivative, reflecting the LIBOR for a 3-month $1 MIllion offshore deposit.
Expressed numerically using 100 minus the implied 3-month U.S. Dollar LIBOR interest rate. $96.00 EURODOLLARS reflects an implied interest rate of 4%, or 100 minus 96. Price moves inverse to yield.