When managing your interest rate expense and risk, companies can use a variety of forward and future contracts. These include, forward forwards, forward rate agreements, and Eurodollar futures. I will discuss a little about each contract.  Forward Forwards A forward forwards is a contract that fixes an interest rate today on a future loan or deposit. When producing the loan you must include the amount of the deposit or loan, along with the start and ending dates of the future interest rate period.   Forward Rate Agreement A forward rate agreement has become a more popular contract, compared to forward forwards contracts. This contract is one that takes place over the counter, and allows a company to fix an interest rate that is applied to specific future interest period on a standard amount. Instead of exchanging currencies, the parties exchange interest payments. The actual interest rate must be used; this means that the interest expense must be discounted back to its present value.  Eurodollar Futures This contract is a contract that is a cash-settled future contract on a 3-month deposit. The deposit is a large amount of $1 million, and pays LIBOR. When trading these contracts you will be familiar with the Chicago Mercantile Exchange (CME), the London International Financial Futures Exchange (LIFFE), and lastly the Singapore International Monetary Exchange (SIMEX). These contracts are traded for delivery in four months, March, June, September, and December. When receiving a contract you can trade it out for 3 years, having a high degree of liquidly for 2 of those years.  While using a Eurodollar future, you will typically receive a locked in interest rate and have a settlement in cash, for this reason Eurodollars are similar to FRAs. However, they are marked to market daily, unlike FRAs.   When quoting a Eurodollar future, an index number is used, this number is 100 minus the annualized interest rate. In order to obtain this into a quarterly rate, you must simply divide it by four.