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Betting On No Change August Mpc.


spoon
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apart from the obvious bearishness on house prices it seems that many people here believe interest rates will remain unchanged at the next meeting. this is at odds with the markets.

this view can be expressed for free using some option plays.

i'll come up with some hard trading ideas soon.

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It looks too good to be true on Betfair at the mo. With the fed raising theirs and CPI at a 7 year high how can the BOE think for a second about doing this? Are there really so many mugs who read the VI press who think they will cut rates? With 'No Change' on at 3.3 it looks pretty tempting!

Edited by tune2001
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It looks too good to be true on Betfair at the mo.  With the fed raising theirs and CPI at a 7 year high how can the BOE think for a second about doing this?  Are there really so many mugs who read the VI press who think they will cut rates?  With 'No Change' on at 3.3 it looks pretty tempting!

Hey thanks for the tip. I just put a tenner on 'No Change'. Sounds like a good bet to me. :)

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It's a dead-cert.

The BOE are like rabbits mesmerised by the approaching headlights at the moment :D

I wish I had so much faith in the MPC. With inflation on the up this month, and probably more to come next month as the oil prices & sterlings losses feed through, the prospect of a cut should not even enter their heads.

However, I am sure Gordon will lean on them with all his might to keep things ticking along, he will be more than happy to sacrifice FTB's and savers to get himself the top job.

I'll give them the benefit of the doubt and go a tenner on no change..... but I dont think it a dead cert !

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short sterling August unchanged strategy.

BUY SEP05 95.50 PUTS (current price 95.53)

SELL SEP06 95.50 MIDCURVE PUTS (SEP05 EXPIRY) (current price 95.72)

i did some this morning for a combined cost of 1 tick.

if they hold rates, SEP05 will get crushed relative to SEP06 as markets will wonder if they'll cut at all this year but with the next move still expected to be down SEP06 should outperform massively.

if they cut the the yield spread will steepen but both puts will expire worthless.

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