High Return Investments

Financial future

A financial future is a futures contract on a short term interest rate
(STIR). Contracts vary, but are often defined on a interest rate index such
as 3-month sterling or US dollar LIBOR.

They are traded across a wide range of currencies, including the G12 country
currencies and many others.

Some representative financial futures contracts are

United States

   * 90-day Eurodollar *(IMM)
   * 1 mo LIBOR (IMM)
   * Fed Funds 30 day (CBT)

Europe

   * 3 mo Euribor (LIF)
   * 90-day Sterling LIBOR (LIF)
   * Euro Sfr (LIF)

Asia

   * 3 mo Euroyen (TIF)
   * 90-day Bank Bill (SFE)

where

   * IMM is the International Money Market of the Chicago Mercantile
     Exchange
   * CBT is the Chicago Board of Trade
   * LIF is the London International Financial Futures Exchange
   * TIF is the Tokyo International Financial Futures Exchange
   * SFE is the Sydney Futures Exchange

As an example, consider the definition of the International Money Market
(IMM) eurodollar interest rate future, the most widely and deeply traded
financial futures contract.

   * There are four contracts per year: March, June, September, December
     (plus serial months)
   * They are listed on a 10 year cycle. Other markets only extend about 2-4
     years.
   * Last Trading Day is the second London business day preceding the third
     Wednesday of the contract month
   * Delivery Day is cash settlement on the third Wednesday.
   * The minimum fluctuation (tick size) is half a basis point or 0.005%.
   * Payment is the difference between the price paid for the contract (in
     ticks) multiplied by the "tick value" of the contract which is $12.50
     per tick.
   * Before the Last Trading Day the contract trades at market prices. The
     Final Settlement Price is the British Bankers' Association (BBA)
     percentage rate for ThreeĞMonth Eurodollar Interbank Time Deposits,
     rounded to the nearest 1/10000th of a percentage point at 11:00 London
     time on that day, subtracted from 100. (Expressing financial futures
     prices as 100 minus the implied interest rate was originally intended
     to make the contract price behave similarly to a Bond (finance) price
     in that an increase in price corresponds to a decrease in yield).

Financial futures are extensively used in the hedging of interest rate swaps.

Investment FreshNews:

Finance Executive Ordered to Prison (Portfolio.com via Yahoo! Finance)
Wed, 06 Aug 2008 21:31:07 GMT
A federal judge today ordered a finance executive convicted of fraud to spend 15 years in prison. And, no, he had nothing to do with subprime mortgages. Donald H. Ayers, 72, was a founder, vice chairman, and chief operating ...

Francis chosen as Folsom's finance director (The Sacramento Bee)
Wed, 06 Aug 2008 20:38:57 GMT
James W. Francis, the town manager in West Hartford, Conn., will become the finance director/chief financial officer for the city effective Oct. 5, Folsom City Manager Kerry Miller announced Wednesday.

IMF backs Finance"s incentives proposals (GMA News)
Wed, 06 Aug 2008 20:27:14 GMT
MANILA, Philippines - The International Monetary Fund (IMF) is backing the Finance department"s proposals to reform the country"s investment incentives system, saying they have the effect of lowering the county"s tax rates which should prompt more investors to choose the Philippines.

Trading halt on Strategic Finance (The New Zealand Herald)
Wed, 06 Aug 2008 23:15:54 GMT
A halt has been placed on trading in the securities of Strategic Finance listed on the NZDX market, ahead of an announcement by the company. NZX Regulation said the halt was at the request of the company, with the announcement expected before the close of business today.

Strategic Finance securities trading halt (Stuff)
Wed, 06 Aug 2008 22:52:42 GMT
A halt has been placed on trading in the securities of Strategic Finance listed on the NZDX market, ahead of an announcement by the company.

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