A quick question on EuroDollar?

[yjl]

Hi,

Is there EuroDollar trader? I have a quick question. I have read that EuroDollar is one of the most actively traded futures. However, I took a look at the chart of EDG08 (2 minute and 5 minute) and the chart looks like a ill-liquid stock chart. Do I look at the right symbol and chart? Which forward month is the most actively traded? Thank you very much.

yjl

[brownsfan019]

You may want the EC or 6E which is the Euro FX futures contract.

[mister ed]

Yes - see what Browns wrote.

EuroDOLLAR is an interest rate contract. Eurodollars are US dollars on deposit at banks outside of the United States; the Eurodollar contract prices the rate of interest paid on these deposits (its more complicated than that but thats the gist of it). The name 'Eurodollar' has been in use a long time before the Euro currency was created - Eurodollars have nothing to with the Euro currency at all.

[Anonymous]

Originally Posted by yjl Hi, Is there EuroDollar trader? I have a quick question. I have read that EuroDollar is one of the most actively traded futures. However, I took a look at the chart of EDG08 (2 minute and 5 minute) and the chart looks like a ill-liquid stock chart. Do I look at the right symbol and chart? Which forward month is the most actively traded? Thank you very much. yjl

Yes EuroDollars are the most actively traded contract, maybe in the world. They tend to trend very nicely as well. The rub: most of the time the movement is very little. Large institutions take positions and make money on slight price changes. So the daily range tends to be very small. On a 2 min or 5 min chart it would look like an illiquid stock possibly.

[yjl]

Thank you all for the info.