What does BAX Contract mean?
A futures contract on 3-month Canadian bankers’ acceptances. A BAX contract is a short-term investment instrument that uses a Canadian banker's acceptance as its underlying security. The contracts are traded on the Montreal Derivatives Exchange.
BAX contracts are also very liquid and flexible.
Futures Knowledge Explains BAX Contract
A banker's acceptance contract used widely in Canada. BAX contract was launched by the Montreal Exchange in 1988 and since than it has grown rapidly. It is very liquid short term instrument. As short-term interest rate futures contracts, BAX contracts play an important role in Canadian money markets.
BAX contract offers arbitrage opportunities with the 3-month Eurodollar futures contract. It is also used for hedging and speculation. BAX contracts are used by treasuries, traders, hedge funds and pension funds.