Eurodollar Futures – Complete 2025 Guide for Traders & Yield Curve Speculators

Eurodollar Futures – Complete 2025 Guide for Traders & Yield Curve Speculators

Introduction

Eurodollar futures have long been a cornerstone of interest rate speculation and institutional hedging. These contracts, once the most liquid financial futures in the world, represent bets on future U.S. dollar interest rates as reflected in offshore dollar deposits. While SOFR futures are now the dominant standard for short-term rate trading, eurodollar futures still play an important role in yield curve modeling, portfolio hedging, and macro trading strategies.

In 2025, as the financial world transitions away from LIBOR-linked contracts and embraces SOFR, understanding the mechanics and strategic value of eurodollar futures is still essential for traders navigating the interest rate landscape.

This expert guide covers everything you need to know about eurodollar futures — including contract specs, macro drivers, trading strategies, and the evolving role of these instruments in modern finance.

What Are Eurodollar Futures?

Eurodollar futures are standardized contracts that allow traders to speculate on the 3-month U.S. dollar LIBOR interest rate set in the future on offshore bank deposits.

Each eurodollar futures contract represents:

– A notional deposit of $1 million USD

– A fixed 3-month term

– A quote that reflects the implied LIBOR rate

Traded on the CME Group, these contracts were once the most widely used tools for hedging interest rate exposure, managing duration risk, and building complex yield curve strategies.

Key Specifications of Eurodollar Futures

Feature | Details

————– | ————————————

Symbol | GE

Exchange | CME

Contract Size | $1,000,000 (notional)

Quotation | 100 – LIBOR rate

Tick Size | 0.0025 (¼ basis point)

Tick Value | $6.25 per contract

Expiration | Quarterly (Mar, Jun, Sep, Dec)

Cash-Settled | Yes

👉 Example: If GE trades at 95.50, the implied 3-month LIBOR is 4.50%.

Why Trade Eurodollar Futures in 2025?

✅ Transition Relevance – Though CME shifted liquidity to SOFR in 2022, eurodollar futures still exist for legacy hedges and historical analysis.

✅ Curve Modeling – Used in forward interest rate curves and pricing of swaps/options.

✅ Spread & Butterfly Trades – Enable customizable pack spreads and fly structures.

✅ Training Ground – Essential knowledge for traders working with SOFR and other rate futures.

👉 Related: Interest Rate Futures – Guide to 2025 Yield Speculation

Eurodollar Futures vs SOFR Futures

Feature | Eurodollar Futures | SOFR Futures

————— |——————–|————-

Reference Rate | 3-month LIBOR | Secured Overnight Rate

Credit Risk | Yes (bank spread) | No (Treasury-secured)

Liquidity 2025 | Declining | Dominant

Exchange | CME | CME

Contract Size | $1 million | $2.5 million

Despite lower volumes today, eurodollar futures remain influential in curve modeling and fixed income analytics.

How to Trade Eurodollar Futures

Step 1: Understand Price Inversion

– Futures price = 100 – expected interest rate

– Example:

– Price = 96.25 → Implied = 3.75%

– Price = 98.75 → Implied = 1.25%

Step 2: Trading the Curve

Trade Type | Strategy

—————- | ———————————

Calendar Spreads | Long near-dated, short far-dated

Packs | 4 consecutive contracts as a unit

Butterflies | 3 contracts (buy 1, sell 2, buy 1)

Rate Cuts/Hikes | Buy/sell based on Fed expectations

Step 3: Choose a Broker

Broker/Platform | Best For | Features

———————- |———————|———————————-

StoneX | Institutions | Deep clearing, yield curve execution

Edgeclear | Active Rate Traders | Low commissions, tailored curve tools

Interactive Brokers | Macro Desk Traders | Global fixed income, portfolio margin

NinjaTrader | Strategy Traders | Automation, advanced spread charts

AMP Global | Retail Traders | Cost-effective access, curve exposure

⚠️ Competitors marketed as “low-cost” often lack robust fixed income curve analytics, making them less suited for professional yield curve work.

👉 Related: Best Futures Trading Platforms in 2025

Sample Eurodollar Futures Trade

– Bias: Fed to pause hikes

– Entry: Buy GEZ25 @ 95.50

– Target: 96.00 (+50 bps)

– Stop: 95.25

– Contracts: 10

– Risk: 25 ticks = $625/contract × 10 = $6,250

– Reward: 50 ticks = $1,250/contract × 10 = $12,500

– R:R: ~2.5:1

Eurodollar Futures Glossary

– Implied Rate – 100 – futures price = LIBOR forecast

– Tick – Minimum increment (0.0025 = $6.25)

– Expiry – Mar, Jun, Sep, Dec cycles

– Packs/Bundles – Groups of 4+ contracts traded together

– Butterfly – 3-contract spread (1x front, -2x middle, 1x back)

– Eurodollar Strip – Long series of contracts for curve building

– Yield Curve – Plot of future interest expectations

Trading Eurodollar Futures with Technical Tools

Even institutional contracts benefit from technicals:

– Moving Averages – Track curve momentum

– RSI/Stochastics – Spot extremes

– FedWatch Tool – Forecast rate probabilities

– Curve Charts – Bloomberg, CME, or proprietary tools

Eurodollar Futures in 2025 – Relevance & Forecast

🌐 Legacy Hedging – Still used by corporates, pensions, and banks.

🧠 Educational Value – Core skill for fixed income traders.

⚠️ Transition Awareness – CME delisting in progress, but certain long-dated expiries remain.

👉 Related: Futures Contract Expiry & Rollover Strategy

Internal Links – Other Relevant Articles

– Interest Rate Futures in 2025

– What Is Futures Trading?

– Futures vs Options

– Day Trading Futures

– Futures Trading Strategies

– How to Trade Futures

Conclusion

Although their dominance has waned since the LIBOR-to-SOFR transition, eurodollar futures still provide value for macro traders, curve analysts, and those looking to understand the foundations of short-term interest rate markets.

Whether you’re studying yield curve dynamics or building a complex macro portfolio, fluency in eurodollar futures expands your edge in interest rate forecasting.

📍 Explore more tools, strategies, and broker reviews at

🌐 bestfuturestradingplatform.com

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