Would you take 180-1 that FOMC will cut rates by 0.50?

Discussion in 'Economics' started by Daal, May 27, 2006.

  1. Daal


    Or 50-1 that they will raise by 0.5?
    Because those are the odds at befair. Its pretty unlikely but I think these odds are ridiculous
  2. btud


    I'll give 100000-1 if FOMC cuts rates by 0.50. It's a complete imposiblity.

    I'll give 1000-1 for a raise by 0.5
  3. Daal


    Then you can easly became rich by betting on the favorite result. Why dont you do it. Till one day a surprise comes and ....
  4. nitro


    Both of these odds would go to 1 in the case of an external shock event.

  5. btud


    I guess in such cases with very small edge, the spreads and/or commissions will eat all your profits.
  6. I'll take that action.
  7. Daal


    Its also 49-1 they will cut -0.25
    1.1-1 for +0.25
    0.75-1 for no change
    You tell me there is no significant edge here?Come on, its a bunch of gamblers betting on the favorite outcome because its satisfying psychologically to do so(and then justify it with all sorts of news). I mean I bet if I look over history its probably something like 30-1 that the action they took on was not expected. But I would like to hear opinions from other people
  8. Did you get those odds-numbers from tradesports.com or hedgestreet.com? If you believe there's "free money" to be made by spreading those "odds" versus the Fed Funds futures & options, you should put on as large of a position as possible. Let us know how that goes.