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Pastimes : Trading the markets..... -- Ignore unavailable to you. Want to Upgrade?


To: Chip McVickar who wrote (2974)1/25/2001 4:19:21 PM
From: wmwmw  Respond to of 4583
 
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.
Bought INKT at close.