I 'd rather use a website with graphs that spare me the calculation ... where can you find that info ? and what is the current probability of a hike on 09/20?
Rick santoli (CNBC CBOT reporter) said yesterday that it was virtually %100. However he did mention that option trading activity was suggesting that major players are hedging there bets in case the fed doesn't co-operate.
I am looking for charts such as the one shown by Ron Insana on CNBC this afternoon. The charts were from Bianco Research but it's available only on subscription apparently
http://www.cbot.com/cbot/pub/page/0,3181,1563,00.html The last price of 96.280 would suggest to me that the market is pricing in a %99.2 chance of a hike. (3.72/3.75=0.992)
I thought this was how you calculate chance of fed raising, Let's assuming 96.28 (3.72-3.5)/(0.25) = 88%... Please correct me if i'm wrong...
I just reworked the numbers and came to your conclusion. Another way to think about is that each tick is worth four percentage points of probability.