Eurodollar futures and options, CME's premier interest rate product and the most heavily traded futures contract in the world, set new volume records in the wake of the surprise 0.5 percent cut in the Fed Funds rate. Volume in Eurodollar futures reached a record 1,614,870 contracts, surpassing the previous record of 1,335,500 contracts set Feb. 4, 1994. The record 511,545 Eurodollar options changing hands beat a record set Jan. 4, 2001, at 446,503 contracts.
Introduced in 1981, Eurodollars are time deposits denominated in U.S. dollars held outside of the United States and have been a benchmark interest rate in corporate funding for decades. The Eurodollar futures contract represents an interest rate on a three-month deposit of $1 million. The underlying value of yesterday's Eurodollar futures trading represents $1.6 trillion.
Chicago Mercantile Exchange Inc. (www.cme.com) is an international marketplace that brings together buyers and sellers on its trading floors and GLOBEX®2 around-the-clock electronic trading system. CME offers futures contracts and options on futures primarily in four product areas: interest rates, stock indexes, foreign currencies and agricultural commodities. On Nov. 13, 2000, CME finalized its transformation into a for-profit, shareholder-owned corporation as it became the first U.S. financial exchange to demutualize by converting its membership interests into shares of common stock that can trade separately from exchange trading privileges. The exchange moves about $1 billion per day in settlement payments, manages $30 billion in collateral deposits and administers more than $1 billion of letters of credit.
