I just found out about eurdollar futures and I am confused.
A eurodollar future contract is defined as a cash settled future based on a Eurodollar Time Deposit having a principal value of USD $1,000,000 with a three-month maturity.
Suppose that a a bank decides to sell 5 eurodollar futures that settle in three months. What exactly does it mean ?
What is going to happen when the constract expires?
Same question if the bank decides to buy 5 eurodollar contracts.