How do you Invest/Trade Eurodollars Futures Contracts?

I understand the idea that Eurodollars are US Dollars that exist in foreign banks. What I don't understand is how or why they are traded on the CME Futures market.





Could somebody explain what or how you gain from purchasing a Eurodollar futures contract?


What is their core market? Meaning, who is actually buying and taking delivery of Eurodollars and what are they using it for?|||this is a big chicago product, popular in chicago among speculators and market makers. but people in the real world can use it to hedge a forward rate. so i want to expand my factory and the bank offers me a 5 year loan in 3 months at a floating rate. well, i can hedge this by selling a similar eurodollar contract at the cme, to protect against an interest rate increase. also, the bank could buy the eurodollar contract and hedge its exposure, too. basically, eurodollars are a proxy for LIBOR, or the rate at which banks in london borrow and lend to each other. so there is a credit risk component involved.





I should note, too, that it's priced as 100- interest rate, so that if the interest rate is 1.20%, the eurodollars contract will be 98.80. so as rates rise, the price decreases, and in theory, the price can't go above 100, but it has before, implying negative interest rates.|||YO ALBY!


TRY INVESTING IN CANADIAN,NEW ZEALAND OR AUSSIE DOLLARS.





ESPECIALLY THE AUSSIE, THE GUYS ACROSS THE DITCH ARE BIG SUPPLIERS OF URANIUM TO THE U.S AND IRON AND MINERALS TO CHINA AND THE REST OF WORLD.


THE RETURNS ARE DEEMED TO BE SAFER, REASON BEING WHY A LOT OF CANADIANS,POMS,JAPANESE AND CHINESE ARE INVESTING HERE TO GUARANTEE FOOD SUPPLY ETC.