What is interest rate futures? What are the characteristics of interest rate futures? What are the influencing factors

Generally speaking, stock, bond, fund and other investment and financial management methods are the most common ones in the market, while futures trading is not well understood by investors due to market risks and unfamiliarity.

Therefore, in this article, we mainly explain a kind of futures trading mode. Interest rate futures. In the following content, we will mainly analyze and understand in detail what interest rate futures are, the characteristics of interest rate futures and the factors affecting interest rate. Let’s go and have a look together without delay, hoping to help you.

Generally, China’s futures market started in 1990, mainly because zhengzhou grain wholesale market was established with the approval of The State Council and other departments, and introduced the futures trading mechanism on the basis of spot on the market, which was the first step in the development of China’s futures market.

In the following years, there emerged many types of futures, which were divided into different types due to their different subject matter. Just like what is the stock index futures we talked about before, it is the futures trading based on the stock index in the market. The meaning of interest rate futures can also be known. It mainly refers to the medium and long term deliverable financial certificates of the trading objects. It is a kind of financial futures with interest-bearing securities as the subject matter standard, and its main features are as follows:

1. It is a short-term investment, which mainly involves the market transaction of fixed time and standard trading volume by investors. It is the forward contract of money market and capital market instruments, which generates the price of interest rate futures contracts in different maturity months in the future by means of centralized matching bidding.

2. For one thing, when bidding, like other futures in the market, it is open bidding in the market. Buyers and sellers stipulate the delivery time, the agreed interest rate and a certain amount of securities in the contract.

3. The price of traded securities is affected by the interest rate in the market, which is inversely proportional. In other words, after the market rate rises, the market price of securities will fall; On the contrary, if the interest rate goes down, the stock market price will go up.

4. There is also an inverse relation between the price of interest rate futures and the real interest rate. In other words, the higher the interest rate is, the lower the bond futures price will be. The converse is that lower interest rates mean higher bond futures prices.

5. The pricing method of interest rate futures is not only cash delivery, but also cash delivery at certain times. The former cash delivery means that the bank takes the existing interest rate as the conversion coefficient to determine the delivery price of the futures contract.

This let us understand some of the characteristics of interest rate futures, for its general content may have a certain degree of understanding, so let us know what are the factors that affect interest rate options field, mainly include the following: one is the government’s fiscal policy and monetary policy, in general inflation also affects market interest rates; Second, national production and income; Third, people’s demand for cars and houses will also affect the future trend of interest rates;

In the final analysis, the main reason for the emergence of interest rate futures is that interest rate fluctuations in the market bring interest rate risks to both lenders and borrowers, in order to reduce the causes of such risks.

Today, the content of this paper on interest rate futures is all over. After reading this article, if you want to know more futures related knowledge, such as: arbitrage instructions, please pay attention to this site, thank you!

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