Eris Homepage | Eris Futures

Live Quotes - USD Swap Futures

Intro Video: Hedging with Eris SOFR

3-minute video from CME Group gives overview of using Eris SOFR for hedging exposure to interest rates
Video shows a commercial loan example of a real estate developer borrowing money at a floating interest rate to fund a 5-year project, then using Eris SOFR to hedge against interest rate increases jeopardizing project profitability
It’s an excellent introduction for other hedgers, as well, (e.g., bank balance sheet, mortgage pipeline, mortgage servicing rights), as it covers the basics of Eris SOFR product design and futures market operation

Perfect for Hedgers: Easy, low cost, transparent

Hedgers use Eris SOFR as an alternative to interest rate swaps. As futures contracts listed by CME Group, Eris SOFR offers market participants the economic performance of an interest rate swap and the advantages of using US future.

	Commercial Loans	Mortgage Pipeline	Mortgage Servicing Rights	Bank & Credit Union Asset/Liability Management	REIT's, Insurance & Fixed Income Portfolios
Issue/Risk	Borrowers and lenders with commercial loans tied to SOFR may lose money as rates move	Rate risk after mortgage commitment and prior to securitization	Market value changes due to rate movement cause income statement volatility	Variable rate funding may reprice, causing losses from mismatched duration	Rate movements cause unrealized losses for bonds and other assets
Solution	Hedge against rate movements using Eris SOFR, IRS, other futures	Hedge risks using Eris SOFR, IRS, TBA MBS, Treasury Futures	Hedge risks using Eris SOFR, IRS, TBA MBS, Treasury Futures	Extend funding duration using Eris SOFR or IRS	Manage portfolio duration using Eris SOFR, IRS, Treasury Futures, interest rate caps
CME Group Article	Eris SOFR for Private Lenders		Eris SOFR for MSR	Eris SOFR for ALM Eris SOFR for Hedge Accounting	REITs are Switching to Swap Futures Eris SOFR for REIT's
Advantages of using Eris SOFR	Easy futures account setup (no ISDA or costly swap clearing agreement) Efficient capital use (up to 65% margin savings vs. cleared IRS) Track SOFR risk (most forecasting models use SOFR, not Treasuries) Transparent prices for trading and daily settlement (exchange, not bilateral) Returns SOFR-based interest on Variation Margin (VM), decreasing funding costs compared to other futures Eligible for FASB hedge accounting

Eris SOFR Overview

Futures contracts that replicate the cash flows and functionality of over-the-counter interest rate swaps, suitable for short-term trading or long-term hedging

No physical delivery: contracts remain outstanding to underlying tenor maturity
Initial Margin up to 65% lower than cleared interest rate swaps
Trade in order book or bilateral block trades, in denominations as small as $100,000 notional (1 contract)