Hello, I consider to start trade Eurodollar futures on CME (now trade Dax) and I wonder if there are any experienced Eurodollar traders that can tell me when is the best time to trade this instrument ? ( I am located in London and thus GMT applies). Are there special times one should avoid trading the Eurodollar? For example, Dax is most of the time not worth trading between 10.30 and 13.30 and after 17.00 due to liquidity and general dullness at these times. Do Eurodollar inhibit dullness and shrinkage of volatility at reoccurring times of the day, if so when? Any help would be greatly appreciated. Flytrade
Eurodollar Time Deposit having a principal value of $1,000,000 with a three-month maturity. (ED) -or- CME Euro FX Futures Trade Unit 125,000 Euro (EC) Sometimes these are mistaken as the same thing, but they are not.
Yes it's true: Eurodollars are a US dollar based bond. EuroFX is the european common currency relative to US dollars. However, there is some significant correlation of course, as both markets react to US interest rates very heavily so things like (this upcoming Friday's) non-farm payroll reports in the USA invevitably juices volatility immediately thereafter. Consequently the night before the NFP announcement usually there is little movement.