Simply put, interest rate futures are an expectation of future interest rates. As the interest rate rises, the expected forward interest rate also rises. The expected increase proves that the current price is low, but the expectation for the future is rising. Naturally, you should hold long-term interest rate futures for profit.

For futures, it is the expectation of future earnings. It doesn't matter whether it falls or not now. What matters is whether the future price will rise relative to the present price. If you expect to go up, you must hold a long position.

Characteristics of interest rate futures:

1, the interest rate futures price changes inversely with the actual interest rate, that is, the higher the interest rate, the lower the bond futures price; The lower the interest rate, the higher the bond futures price.

2. The delivery method of interest rate futures is quite special. Interest rate futures are mainly delivered in cash, sometimes in cash. Cash delivery is to determine the delivery price of futures contracts with the existing interest rate of banks as the conversion factor.

Interest rate futures are medium-term, long-term and short-term deliverable financial vouchers of trading objects, and are financial futures based on securities. In fact, it is a short-term investment with a fixed term and a standard transaction amount in the trading market, and it is a forward contract for money market and capital market instruments.

Like other futures, interest rate futures are also subject to legal constraints. Through open market bidding, buyers and sellers agree to deliver a certain amount of securities at an agreed interest rate on a specified date in the future.

The market price of these securities is deeply influenced by the fluctuation of market interest rate. If the interest rate rises, its market price will fall. If the interest rate falls, its market price will rise.

There are many factors that affect the interest rate level, but the main factors are: the government's fiscal policy, monetary policy, inflation, national production and income, and national demand for cars and houses, all of which will affect the interest rate trend.

Interest rate futures can generally be divided into short-term interest rate futures and long-term interest rate futures. The former is based on the three-month interest rate in the interbank lending market, while the latter is based on long-term bonds with a maturity of more than five years.

The fluctuation of interest rate makes both borrowers and borrowers in the financial market face interest rate risk, especially more and more investors holding government bonds need tools to avoid risks and hedge. In this case, interest rate futures came into being. The earliest interest rate futures business was the United States.