An interest rate futures contract, such as a t-bond or Eurodollar contract, has an interest-bearing instrument as an underlying asset. These futures are typically employed to hedge against the risk of interest rates rising or falling in an adverse direction.
Interest Rate Futures Markets
30-Day Federal Funds - Federal Fund futures contracts indicate the average daily federal funds effective rate in a particular month. Eurodollar Futures - A common use for Eurodollar futures contracts is to secure the current interest rate on money it expects to borrow at a later time. Swap Futures - A swap is a derivative in which two parties exchange each other's financial instruments. T-Bond Futures - Compared with treasury notes or treasury bonds, t-bonds take the longest time to mature. T-Note Futures - The most commonly quoted and discussed is the 10-year t-note because it articulates long-term expectations of the market.