How is a eurodollar futures contract priced?

External question — Personal Finance Stack Exchange Author: John B Original post: https://money.stackexchange.com/questions/164923 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. I am currently reading Hull's derivatives book and there are certain sections that dont make sense. Here is one section describing eurodollar futures: Eurodollar futures trade until two days before the third Wednesday of the delivery month. At that point, there is a final settlement equal to 100 - R, where R is the three month U.S. dollar LIBOR fixing on that day expressed with a quarterly compounding and an actual>360 day count convention. On the other hand, the text says The contract is designed so that a one-basis-point move in the futures quote corresponds to a gain or loss of $25 per contract. I am having a hard time understanding what is going on here. The price of the contract is quoted as 100-R. So obviously they cant mean that a one basis point move changes this quoted price, it would change by one cent by definition. So I am assuming the quoted price is not the actual value of the contract. So apparently, the quoted price and the actual value of the contract are different and the change of the value of the contract is called the basis point value = face value * (days/360) * basis point change. But, i just dont understand why this is valid. I mean the text just does not really explain how to value a eurodollar futures contract. Can someone clearly explain how a eurodollar futures contract is priced? And how this differs from the quoted price? And why? and why a one basis point change changes the basis point value by 25, and why this affects the contract value by 25?

External answer — Personal Finance Stack Exchange Author: AKdemy Original post: https://money.stackexchange.com/a/164930 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. Looking at this post Libor cessation is no longer particularly useful. For historical purposes, the national was 1 million, for 3 months, with 30/360 daycount. Hence, 1000000×90÷360×0.0001 = 25. The quotes price was indeed 100-r.