Okay....!
>>I once saw an explanation but am not sure if I remember it right.
Look at "01Feb", it settled today at 94450, which means 94.45, 100 - 94.45 = 5.55, this is the yield that future assign to federal fund at Feb1. If Fed lower interest by .5 point, then the yield should be 5.5, so it is 0.05 point away from 100% probability. 0.05 / 0.5 = 10%, it is 10% probability away from 100% chance for a .5 point cut, which is 90% probability.<<
cbot.com
But this doesn't factor in the probability of a .25% move...?
Having watched the futures charts move after Fed announcements, I can say that rarely does the end result factor into a profitable trade decision, unless one is positioned correctly many days and points ahead of a meeting date. Most events "Swing" so much that all stops are chopped to death by the move and only the largest players can benefit. Even Then..., what ones doing is taking a "Gamble" like Super Bowl picks.
So are you trying to position ahead..?
Personally, I'm expecting .25% cut. |
