Maybe its because I am just too tired… and I am not seeing it… can someone please tell me if the eurodollar contract goes up in value when interest rate increases or decreases???
Going long in Eurodollar futures means that you have locked in to lend at a specific implied rate. After you go long in to the contract at 5%, and then the interest rate goes up to 6 percent, you (long position) has lost out. So, long position in Eurodollar futures loses money when interest rate goes up. This is exactly opposite of FRA’s.
thank you very much!!!