Margin trading products are complex instruments and come with a high risk of losing money rapidly due to leverage. 85.67% of retail investor accounts lose money when trading on margin with this provider. You should consider whether you understand how margin trading works and whether you can afford to take the high risk of losing your money.
This portrays market pricing (expectations) for the next central bank meeting – the step (in basis points) from the next meeting to the second, and number of hikes priced for the full-year.
(Source: Pepperstone - Past performance is not indicative of future performance.)
Given the data flow above and the moves in price we've seen of late, we can use the options market to understand the expected movement priced into the volatility markets. Using the weekly ‘straddle’ price we can project the implied/breakeven move onto spot and see the expected range on the week with a 68.2% and 95% level of confidence. If we look at markets as a series of probabilities or distribution of outcomes, these can offer guidance in that assessment. This can help with mean reversion and our risk process.
(Source: Pepperstone - Past performance is not indicative of future performance.)
The material provided here has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Whilst it is not subject to any prohibition on dealing ahead of the dissemination of investment research we will not seek to take any advantage before providing it to our clients.
Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. It does not take into account readers’ financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.