Interest Rate Futures and Bond Futures

CFA Level III Fixed Income
#1

Hi,

Are futures on interest rate options and bond futures the same thing?

In risk management, we use long bond futures to increase the duration.

In fixed income, we use long futures on interest rates to increase the duration.

Thanks

#2

One would think they are the opposite of one another. Long in bond=short in interest rates

I just investigated and future on interest rates “is a financial derivative (a futures contract) with an interest-bearing instrument as the underlying asset”. So yes they are the same thing.

Careful in options though. In an interest rate option the underlying is LIBOR so it’s a new ballpark, a new league, a new sport even.