Interest Rate Future
Definition of 'Interest Rate Future'
A futures contract with an underlying instrument that pays interest. An interest rate future is a contract between the buyer and seller agreeing to the future delivery of any interest-bearing asset. The interest rate future allows the buyer and seller to lock in the price of the interest-bearing asset for a future date.
Investopedia explains 'Interest Rate Future'
Interest rate futures can be based on underlying instruments such as:
Because interest rate futures contracts are large in size (i.e. $1 million for Treasury Bills), they are not a product for the less sophisticated trader.