Trading STIR Futures

Jacket text for Trading STIR Futures

Short term interest rate futures (STIR futures) are one of the largest financial markets in the world. The two main contracts, the Eurodollar and Euribor regularly trade in excess of one trillion dollars and euros of US and European interest rates each day. STIR futures are also unique because their structure encourages spread and strategy trading, offering a risk reward profile incomparable to other financial markets. STIR futures are traded on a completely electronic market place that provides a level playing field, meaning that the individual can compete on exactly the same terms as banks and institutions. The sheer number of trading permutations allows traders to find their own niche

'Trading STIR Futures' is a handbook to the STIR futures markets, clearly explaining what they are, how they can be traded, and where the profit opportunities are. The book has been written for aspiring traders and also for experienced traders looking for new markets.

This book offers a unique look at a significant but often overlooked financial instrument. By focusing exclusively on this market, the Author provides the reader with a comprehensive guide to trading STIR futures. He covers key points such as how STIR futures are priced, the need to understand what is driving the markets and causing the price action, and provides in-depth detail and trading examples of the intra-contract spread market and cross-market trading opportunities of trading STIR futures against other financial products.

An essential read for anyone wishing to enter this market.

Chapter headings for Trading STIR Futures

1. Basics of STIR Futures

Introduction to STIR Futures
What are STIR futures?
Where and how are they traded
Contract structure and general specifications
Brief introduction to spreads and strategies
The advantages of trading STIR futures compared to other financial products
STIR Futures Pricing
Spot and forward rates
The STIR future Theoretical Price
Basic pricing concepts
Advanced pricing concepts
Arbitrage considerations
The Drivers Of STIR Futures Prices
Changing shape of the yield curve
Price sensitive effects

2. Mechanics of STIR futures
Accessing The Markets
Clearing and settlement
Fixed and variable costs
Liquidity and rebate schemes
The choice of clearing member or trading arcade
Software and hardware
Selecting an ISV
Influences regarding the trader�s choice of markets and contracts
Domicile and time zones
Taxation considerations
Remote trading
Spread betting alternatives

3. Trading STIR futures
Trading Opportunities: The Two Trades
Outright trading
Spread trading
Spread Trading: Intra-Contract Spreads
Calendar spread
Butterfly spread
Condor spread
Introduction to strips, packs, bundles and stacks
Summary - when to use strategies
Spread Trading: Inter-Contract Spreads
Introduction to bonds
Introduction to bond futures
Spreading STIR futures strips against bond futures
Spreading STIR futures against swap futures
Spreads between international STIR futures
Summary - when to use the strategies

4. Trading Considerations For STIR Futures
Zero Sum Game - Know The Players
Players
Supporting cast
How to play
Game Play
The discovery process
Trigger point
Guide to technical indicators

5. Endgame
A Day In The Life Of A STIR Futures Trader
Interview With A Trader

10 Rules For Trading STIR Futures

Appendices
STIR Futures Contracts
Contract Specifications For Eurodollar, Euribor, Short Sterling and Euroswiss
Exchanges
Clearing Members
Independent Software Vendors (ISV)
Trading Arcades
Economic Calendars
Key Interest Rate Changes (GBP, SWF, EUR, USD)
Bibliography

About Stephen Aikin

Stephen Aikin has spent almost 20 years continuously trading STIR futures for his own account, every year of which has been profitable. He holds an MSc in Financial Markets and Derivatives and lives in London.

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