Alongside commodities, currencies and equity indices, bond markets (also known as bond markets) are an asset class for which investors sometimes have a need to hedge - mainly in order to hedge against interest rate risks. The Euro Bund Future is a futures contract whose underlying is a notional federal bond with a term of 10 years and an interest rate of 6 percent. The Bund Future is also a popular instrument among private traders in Germany.
Contract specifications
| Designation | Euro BUND Futures |
| Abbreviation | FGBL/GBL |
| Contract size | 1000 EUR x score |
| Price quote | Percent (of nominal value) |
| Tick size | 0.01 percent |
| Tick value | 10 EUR |
| Daily price limit | None |
| Stock Exchange | Eurex |
| Trading hours (DE) | 02:15 - 22:05 |
| Contract months | Mar (H), Jun (M), Sep (U), Dec (Z) for the next 3 quarters |
What influences the price of the Euro Bund Futures?
There is a negative correlation between the yield (interest) and the price (price) of a bond. That is, when interest rates rise, this is accompanied by falling bond prices.
The Bund Future thus rises when yields on Bunds (debt securities of the Federal Republic of Germany) are expected to fall and vice versa.
Market participants exposed to interest rate risk thus use the Bund future to hedge against risks from interest rate changes. The futures contract is also a popular instrument among traders for short- to medium-term speculative transactions.
Contract size
The multiplier of the Bund future is 1000 EUR. Therefore, to determine the equivalent value moved with a future, the Bund Futures score must be multiplied by 1000 EUR.
Since the smallest possible movement (tick size) is 0.01 points, the tick value is 10 EUR.
The contract specifications of the Bund future can be found in the TWS by entering the symbol (GBL) and then double-clicking on it