Bloomberg News –
The Chicago Mercantile Exchange, the biggest U.S. futures market, handled a record 1.5 million Eurodollar options contracts Wednesday, as traders used them to bet on changes in borrowing costs.
The exchange also had record electronic trading of interest-rate futures and options, with 2.1 million contracts changing hands on Wednesday, the exchange said in an e-mailed statement. Eurodollar contracts gauge expectations for three-month U.S. interest rates.
The yield on Eurodollar futures for September delivery increased three basis points, or .03 percentage point, to 4.02 percent Wednesday. The contracts settle at a lending rate that has averaged 21 basis points higher than the Fed’s target over the past 10 years. They added one basis point Thursday to close at 4.03 percent.
Source: Chicago Tribune