interest rate future

Interest Rate Futures Contract

An agreement to buy and sell a debt obligation at a certain date at a certain price. For example, Investor A may make a contract with Creditor B in which A agrees to buy a certain number of B's bonds at a certain date for a certain amount. The value of an interest rate futures contract varies according to changes in the interest rates. For example, if interest rates rise, the value of the futures contract falls because a potential buyer will be able to buy another interest rate futures contract with a better interest rate. See also: Plain vanilla swap.

interest rate future

A contract on the future delivery of interest-bearing securities, primarily U.S. Treasury bills (on the Chicago Mercantile Exchange) or Treasury bonds (on the Chicago Board of Trade), although contracts on certificates of deposit, Ginnie Mae certificates, and Treasury notes are also available. As with other futures contracts, interest rate futures permit a buyer and a seller to lock in the price of an asset (in this case, a specified package of securities) for future delivery. The contracts are large in amount ($1 million for bills and $100,000 for bonds) and lend themselves to sophisticated analysis. Amateurs beware!

Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

Mentioned in ?

References in periodicals archive ?

Standard Chartered reports completion of interest rate futures transaction

On June 9, 2014, several Liffe US interest rate futures were transitioned to ICE Futures Europe and ICE Clear Europe.

Intercontinental Exchange completes first phase of Liffe transition

Last month, India's central bank took action to reverse that, announcing it would introduce 10-year interest rate futures contracts by the end of the year.

BSE to launch currency, interest rate derivatives in December

In addition to these IRRI rice, Palm Olein and Kibor interest rate futures are also listed and traded on NCEL.

New record as over 100,000 Contracts traded on NCEL in November

In addition, NYSE Liffe also extended the trading hours for its Euribor interest rate futures contract in 2007, to incorporate the Asian trading day.

NYSE Liffe offers FTSE index futures during Asian trading day

Similarly, it is believed that yields on short-term interest rate futures contracts might rise on speculation that policy makers would lift their overnight interest rate by 0.75 percentage point.

Interest rates could increase in Brazil

Alankit is already providing services to millions of its customers like online trading in equity, future and option segments, commodities, currency derivatives, interest rate futures, portfolio management, depository participant, registrar and share transfer agent.

Alankit Group to provide services to New Pension System subscribers

Interest Rate Futures ( IRF) fell flat with public sector banks keeping away from the market due to policy glitches.

IRF FALLS FLAT AT PSU BANKS

In the money market, short sterling interest rate futures eased downwards, reflecting a sense that the pressure on the Bank of England to raise its official interest rate from the 4.5 per cent, where it has been since last August, are less urgent than they seemed last week.

Yearly rise in earnings speeds up

Central bank officials said the sharp rise appears to have stemmed from increases in long-term interest rates in late June, which apparently prompted the banks to actively conclude derivatives contracts involving interest rate futures.

Balance of derivatives contracts at 13 banks at $22.3 tril

Prices of three-month Euroyen interest rate futures fell on the Tokyo International Financial Futures Exchange, with the yield on the key September contract up to 0.43% from 0.4% Wednesday.

BOJ moves to drain funds from money market

Financial browser ?

Full browser ?

CITE

Site: Follow: Share:

Open / Close