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Recently I've been looking at the Eurodollar futures (GE) listed on CME to trade on the daily chart. With a low margin requirement (AMP requires $250 maintenance) and a tick size of .0025 and tick value of only $6.25 for the nearest expiring contract month, it seems like a great market for longer time frame charts. As you probably already know, this contract is extremely liquid due to the sheer amount of institutional presence. Unfortunately, this contract doesn't move very much so it is not a worthwhile instrument for intraday purposes. However, it has great price action on the daily chart.
If anybody is trading this market on longer time frame charts, such as the daily, what do you think of this product vs. trading currency products like 6E?
Hi @mangolassi. Eurodollars are a great spreading market. There are a lot of good long term plays in holding spreads and there are lots of short-term / scalping money to be made in trading in and out of spreads. Watch the spreads...calendars, butterflies, strip, etc, and get a feel of the construction. The implied market is huge in there.
If you have any questions about the products or services provided, please send me a Private Message or use the futures.io " Ask Me Anything" thread
4th part was never written and I don't think he has any intentions in writing it.
The 3 pdfs are great reading and I highly recommend them to anyone wanting to trade the Eurodollar.
@mangolassi: While the 3rd part is regarding options trading, the first and the second parts are regarding trading futures and in particular spreads and butterflies.
You should read about these as they add another dimension and make it easier to trade the curve (which is what you do when trading outrights).
eurodollar futures represent bets on interest rates at different points in the future. Very short trm interest rates (such as the next 3 months) don't move very much...but bets on interest rates 5 years in the future move quite a bit.
There is a eurodollar futures contract (liquid) out to 5 years...and less liquid out to 10 years.
So, if you look at the contract referencing December 2021 (~ 4 years out) contract ticker GEZ1 you will see plenty of intraday price action...inparticular on the bollinger band on the 4hr chart.
