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  • February 17, 2023
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Eurodollar Futures Stack Hedge

A stack hedge that uses Eurodollar futures. The hedger stacks a number of these futures for subsequent periods in one nearby delivery date. The Eurodollar futures are cash-settled and hence the hedger will keep the entire number of contracts until just prior to the expiration date and closes out the expiring ones and sells further-months, and the process continues in the same manner, each time closing out the entire “outstanding” number of contracts, nearing expiration, and selling or rolling forward a smaller number of contracts for further expirations (each time, the number will be smaller by the amount of contracts originally the hedger wanted to spread over different delivery dates).


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