Fed Fund Futures and Options

30-Day Fed Fund futures and options are one of the most widely used tools for hedging short-term interest rate risk. Fed Fund futures are a direct reflection of collective marketplace insight regarding the future course of the Federal Reserve’s monetary policy.

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Key Benefits

 

  • Deep liquidity to manage risk or express a view on changes in Fed monetary policy
  • Provide a gauge of market expectations about the Fed’s action at future FOMC meetings
  • Offer trading in transparent markets with low transaction costs, daily mark-to-markets and virtual elimination of counterparty credit risk
  • Allow spreading against other short-term interest rate contracts in the CME Group suite of interest rate products, including Eurodollar futures and options

CME FedWatch Tool

Check today’s Fed rate hike probability with the CME FedWatch tool, which uses CME Group 30-Day Fed Fund futures prices to gauge the probability of an upcoming rate hike.

Fed Fund Resources

Fed Funds Futures in a Post-ZIRP World
With the FOMC more actively managing its key target rate, Fed Funds futures have grown dramatically. But how well do Fed Fund futures predict Fed policy decisions?

A Practitioner's Guide to STIR Contract Amendments
Get an overview of the contract amendments made to Eurodollar futures and 30-Day Federal Funds futures effective, November 17, 2018

30-Day Fed Funds Settlement
View the latest final settlement price and implied average daily effective federal funds rate.

Video: Introduction to CME FedWatch
Gain a better understanding of the CME FedWatch tool, which uses 30-Day Fed Fund futures prices to gauge the probability of an upcoming rate hike.

Video: Using the Fed Dot Plot to Inform Your Strategies
Paired with Fed Fund futures pricing, the Fed "Dot Plot" can offer valuable insights for trading.

Related Information

Short-Term Interest Rate Inter-Commodity Spreads (ICS)
CME Globex listed STIR ICS offer efficient execution of a common trading strategy, reduced leg risk on executions and formation of spread liquidity.

STIR Analytics Tool
Analyze the spread between Eurodollar futures and Fed Fund futures over time - from one week to one year.

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