Each interest rate futures contract is linked to a specific underlying debt instrument, such as U.S. Treasury bonds or euros. Investors purchase interest rate futures contracts to profit from interest rate fluctuations in the debt instrument. Understanding the information contained in the interest rate future listings is the first step to successful investing in interest rate futures.
Go online to the CME Group home page and click on the Interest Rate link. Scroll down to the Interest Rates Product Slate and select an interest rate futures product. Click on the link to bring up the product listing information. You can also go to TradingCharts.com, select the Commodity Quotes tab, then click on the Interest Futures Quotes link. Select an interest future, then click on the link to bring up the list. Although the two sites are set up differently, both contain the same information.
Look at the first column on the far left. This column identifies the expiration month and year for each interest futures contract currently traded. Now notice that the interest rate listing information is grouped into Current Session, which refers to the most recent trading session, and Prior Day, or the trading day before the Current Session.
Start with the information contained under the Current Session heading. The first column, Open, is the first price the interest rate futures contract traded at when the market first opened. The next two columns, High and Low, indicate the day’s highest and lowest trading prices for the interest rate futures contract. The next column, Last, is the final price the interest rate futures contract traded at when the session ended. The Time column indicates the date and time of the last trade, and the Set column is the official closing price determined by the exchange. Chg, or Change, tells how much the contract price increased or decreased compared with the prior trade date. Volume indicates the number of futures contracts traded during the session.
Look underneath the Prior Day heading at the Set and Op Int (open interest) columns. Set is the exchange’s official closing price for the prior day’s trading session, and the Op Int is the number of futures contracts investors still hold open. The final column, Opt’s, or options, has two sub-headings, Call and Put. Clicking on the Call link brings up the interest rate futures contract’s call option chain, and clicking on Put brings up the futures contract’s put option chain.
Items you will need
- Online interest rate futures listings
- Investors can use interest rate futures options to protect their interest rate futures contract trade.
- Be aware that interest rate futures are priced in fractions of cents.
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