
Futures Pack
The futures pack is a contract to buy a set number of Eurodollars at a pre-established price in four consecutive delivery months. It is a variation on a Eurodollars futures contract, which is an agreement to buy or sell U.S. dollar-denominated deposits at foreign banks or at the overseas branches of American banks at a set exchange rate at a future date. The quoted prices of futures packs and bundles are based on the average net change from the previous day’s settlement prices for the entire group of contracts, in increments of one-quarter of a basis point (0.25 bps). Futures bundles are another way to execute a series of trades. Using a single purchase of multiple futures contracts is known as buying futures strips, also known as calendar strips. The futures pack is a contract to buy a set number of Eurodollars at a pre-established price in four consecutive delivery months.

What Are Futures Packs?
The futures pack is a contract to buy a set number of Eurodollars at a pre-established price in four consecutive delivery months.
It is a variation on a Eurodollars futures contract, which is an agreement to buy or sell U.S. dollar-denominated deposits at foreign banks or at the overseas branches of American banks at a set exchange rate at a future date.



Understanding the Futures Pack
Futures packs and bundles comprise about 20% of Eurodollar futures contract transactions. Eurodollars are U.S. dollar-denominated deposits held in banks overseas. They are not subject to U.S. regulations, so the value of Eurodollars tends to fluctuate more against the value of the currency of the nation in which they are held.
An investor might buy a futures pack in June with delivery dates in September, October, November, and December. That makes them shorter-term bundles. Futures packs give the investor the advantage of being able to transact several trades at a single price. Since the order is for multiple deliveries, it may cost less than entering each order separately.
The quoted prices of futures packs and bundles are based on the average net change from the previous day’s settlement prices for the entire group of contracts, in increments of one-quarter of a basis point (0.25 bps).
Siblings to the Futures Pack
Futures bundles are another way to execute a series of trades. In this case, the investor agrees to simultaneously purchase or sell a set number of futures contracts in each consecutive quarterly delivery month over a period of one or more years.
Using a single purchase of multiple futures contracts is known as buying futures strips, also known as calendar strips. Traders use futures strips to lock in a price for their target timeframe. A futures strip might be purchased to lock in a price for natural gas futures for one year, with 12 monthly contracts connected in a strip.
Futures strips are common in the energy market. Traders use them to hedge and speculate on the price movements in oil, natural gas, and other commodities. Futures strips, packs, and bundles also are used in trading on interest rates, agricultural goods, and energy futures.
A Short Primer on the Futures Market
Futures are a type of financial contract which obligates the buyer to purchase or sell an asset at a predetermined price at a specific future date. The asset represented in the contract can be a physical commodity or a financial instrument. Futures are essentially a way to speculate on the price movement of the underlying asset. Though associated with an agrarian past, futures markets now involve the buying, selling, and hedging of financial products and the direction of interest rates.
Producers and suppliers use futures contracts as a way to smooth out volatility in the prices they can get for their goods. Traders use them to make money on the fluctuations in price. Demand in the futures markets generally grows when the outlook in the stock market is uncertain. Fulfillment of a futures contract can involve physical delivery of an asset or cash settlement.
The best known future markets are the Chicago Mercantile Exchange (CME), the New York Mercantile Exchange (NYMEX), and the Chicago Board of Options Exchange (CBOT). The Commodity Futures Trading Commission registers and regulates future markets in the United States.
Related terms:
Commodity Futures Contract
A commodity futures contract is an agreement to buy or sell a commodity at a set price and time in the future. Read how to invest in commodity futures. read more
e-CBOT
E-CBOT was an electronic trading platform allowing traders to transact in futures and options contracts listed on the Chicago Board of Trade (CBOT). read more
Eurodollar
The term eurodollar refers to U.S. dollar-denominated deposits at foreign banks or foreign branches of American banks. read more
Eurostrip Defined
A eurostrip, short for "eurodollar futures strip," is a derivative transaction comprised of a series of consecutive eurodollar futures contracts. read more
Futures
Futures are financial contracts obligating the buyer to purchase an asset or the seller to sell an asset at a predetermined future date and price. read more
Futures Bundle
A futures bundle is a type of futures order that enables an investor to purchase futures contracts in quarterly periods of between one and 10 years. read more
Futures Contract
A futures contract is a standardized agreement to buy or sell the underlying commodity or other asset at a specific price at a future date. read more
Futures Exchange
A futures exchange is a central marketplace, physical or electronic, where futures contracts and options on futures contracts are traded. read more
Futures Strip
A futures strip is the buying or selling of futures contracts in sequential delivery months traded as a single transaction. read more