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Below is a summary and basic information from the exchange for some of the popular commodities that fall under the interest rate sector.
The U.S. Treasury notes and bonds are traded on the CBOT, while the Eurodollar is traded at the CME. These futures contracts are large in size and experience is needed to properly navigate these markets.
30-year bond futures are part of the financial commodities futures sector in which the contract holder agrees to purchase or sell a bond on a specified date at a predetermined price. Bond contracts are standardized and are overseen by a regulatory agency that ensures a level of equality and consistency. Also known as a 30-Year T-Bond, is a U.S. government debt security, with a maturity of 30 years. Over that time, the bond will pay interest every six months and that income is only taxed on a federal level.
$100,000
1/32 = $31.25
dollars per contract
Jan, Feb, Mar, April, May, June, July, Aug, Sept, Oct, Nov, Dec
Deliverable
Last business day of the delivery month.
A 10-year Treasury note futures contract pays interest at a fixed rate once every six months and pays the face value to the holder at maturity. An advantage of investing in 10-year Treasury notes is the interest payments are exempt from state and local income tax; however, they are still taxable at the federal level. One U.S. Treasury note has a face value at maturity of $100,000.
$100,000
1/2 of 1/32 = $15.625
dollars per contract
Jan, Feb, Mar, April, May, June, July, Aug, Sept, Oct, Nov, Dec
Deliverable
Last business day of the delivery month.
A Eurodollar future is a contract on a three-month Eurodollar deposit of one million U.S. dollars. Final settlement at expiration is based on the value of three-month British Banking Association (BBA) Libor. Eurodollar futures are time deposits denominated in U.S. dollars and held at banks outside the United States. Often confused with the currency pair EUR/USD or euro FX futures, they are not related to Europe's single currency, the Euro, which was launched in 1999.
$100,000
0.005 = $12.50
dollars per contract
Jan, Feb, Mar, April, May, June, July, Aug, Sept, Oct, Nov, Dec
Financially Settled
Second London bank business day before 3rd Wednesday of the contract month. Trading in expiring contracts terminates at 11:00 a.m. London time on the last trading day.
