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Libor Speculation
HiCan someone explain me how can a private investor speculate on an interest rate index like the LIBOR?Cheersyayuto
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- Martinghoul
- Posts: 188
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Libor Speculation
Buy/sell some Eurodollar futures would be the simplest way, methinks...
Libor Speculation
Interesting point. So, if one were to expect a decrease of the 3m USD Libor, he/she would buy a CME Eurodollar future and, after the increase of the index, would sell another CME Eurodollar future for a higher price. But correct me if I'm wrong: Eurodollar futures are highly leveraged (face value of USD 1mio). Thus the potential losses for a private investor are much higher. Wouldn't it be safer to use a less leveraged mean of speculation? For example, are there any CFDs on the Libor?
Libor Speculation
The risk per contract is just $25/bp. 200 bps would be a big move in the front contracts, so they're not all that risky.