Wall Street advanced sharply last week as investors interpreted minutes from the Federal Reserve's last meeting, as an indication that the central bank is going to keep cutting interest rates in order to boost the economy. The Dow Jones industrial average, and Standard & Poor's 500 index, reached new record highs. Leading the charge has been the high tech Nasdaq 100, with companies such as Google, Apple and RIM (Blackberry) powering to record levels. Many questioned Google's IPO price of $100 per share, but with a share price above $600, Google continues to grow at an astonishing pace says Michael Wright of Betonmarkets.com The minutes from the Federal Open Market Committee's September 18th meeting revealed that Fed governors voted unanimously for a half-point cut. The minutes also showed that officials were concerned that weakness in the dollar, could lead to higher inflation. Balanced against this were fears that the summer's credit crisis could still pose a significant risk to economic growth. The market interpreted this as meaning that the Fed is willing to intervene with a rate cut. Many believe the likelihood of a second cut either in October or at the December meeting seems greater than before the minutes were released.
Furthermore, the president of The Federal Reserve Bank of St. Louis, William Poole said during a speech on Tuesday, that he believes the financial markets are "still fragile" from weakening credit conditions, but that they do appear to be stabilising. San Francisco Federal Reserve Bank President Janet Yellen, said in a speech, the central bank must focus on "how financial market developments are likely to affect employment, output and inflation."
All this doesn't look good for the US dollar, which has lately suffered major losses against all major currencies. As of writing, the Canadian dollar is worth more then the USD, for the first time in more then 30 years. The Euro/USD is currently in consolidation mode after breaking the 1.40 barrier in August of this year, and Sterling is trading above two dollars to the pound.
This time a rate cut, if it comes, may not be as unexpected, and so might not create as volatile a move as it did after the last one. After the excitement of September, and with the next US rate cut potentially already priced in, it may be time for some consolidation on the currency markets. With the ECB widely expected to keep rates the same going into the New Year, the best point of attack may be the EURO/USD exchange rate, which has been consolidating over the past month.
With BetOnMarkets.com the average trader can take advantage of this possible situation with a 'barrier range' bet, which compensates a trader, if a trade doesn't touch either of two predetermined levels for the duration of the bet. You are predicting that the market will remain within two higher and lower barrier levels.
A no touch on the EURO/USD with a 30-day term, and a 500 pip spread either side, yields around 10%.
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Betonmarkets.com is the leading fixed-odds financial betting website. The website has processed over 10 million bets since inception in 2000, and generates annual turnover in excess of US$ 100 million. Betonmarkets offers a wide range of fixed-odds financial bets on forex rates, stock indices, and international stocks.
Betonmarkets is operated by the Regent Markets Group of companies. Regent Markets is affiliated to the Regent Pacific Group, a Hong Kong-listed investment group. Regent Markets has offices in three countries, and holds bookmakers licenses in the Isle of Man, the UK, and Malta.
Fixed-odds financial betting offers particular advantages over other forms of financial betting and investments, such as limited risk, potentially high payouts, and unique market opportunities. Particularly popular is Betonmarket's Range Bet, which offers the opportunity to profit from a period of quiet market action.
Betonmarkets also offers the following bet types: the Bull/Bear bet, the One Touch bet, the No Touch bet, the Range and Expiry Range bets, the Double One Touch and Double No-Touch bets, and a variety of intraday bets. Contracts are available on foreign exchange rates, major stock indices, and stocks.
Fixed-odds bets are also known as binary options, binary bets, contingent claims, spot options, box options, clickoptions, and offer market participants a unique tool to profit from market movements.
BetOnMarkets Bet Types:
One Touch Bet: You would buy a one-touch bet if you believe the market will touch a given point at least once before the bet expires. In other words, a one-touch pays out, if at any time prior to expiration, the market touches or trades through the specified barrier. Example: [Pays 100 if the FTSE touches X between today and date T]
No Touch Bet: A no-touch bet is the opposite of the one-touch bet. You would buy a no-touch bet if you think the market will never reach a certain level within a specified range of time. Example: [Pays 100 if the FTSE does not touch X between today and date T]
Bull Bet: You would buy a bull bet if you believe the underlying security/index/currency pair will be higher than a certain level (also referred to as the barrier level) on the maturity date. Example: [Pays 100 if the FTSE closes higher than X on date T]
Bear Bet: You would buy a bear bet if you believe the underlying security/index/currency pair will be lower than a certain level (also referred to as the barrier level) on the maturity date. Example: [Pays 100 if the FTSE closes lower than X on date T]
Expiry Range Bet: You believe that the market will be between two distinct levels (high and low) on the expiry date. Example: [Pays 100 if the FTSE closes between X and Y on date T]
Barrier Range Bet: You believe that the market will never touch two pre-determined barrier levels (high and low) before or on the date the bet expires. In other words, when you buy a barrier range you will win only if the market never touches the two barrier levels you have chosen. Example: [Pays 100 if the FTSE never touches X and Y between today and date T]
Double Touch Bet: You believe that the market will touch two pre-determined barrier levels (high and low) before or on the date the bet expires. In other words, when you buy a barrier range you will win only if the market touches both of the two barrier levels you have chosen. Example: [Pays 100 if the FTSE touches both X and Y between today and date T]
Up or Down Bet: You win if the market touches either of two pre-determined barriers before or on the date the bet expires. Example: [Pays 100 if the FTSE touches either X or Y between today and date T]
Double Up Bet: A Double Up bet pays two times the premium if the market rises above a given level between the time of purchase and the close of trading. It expires at the close of business on the day of purchase of the bet. Example: [Pays 100 if the FTSE closes above X between now and the close of trading today]
Double Down Bet: A Double Down Bet pays two times the premium if the market drops below a given level between the time of purchase and the close of trading. It expires at the close of business on the day of purchase of the bet. Example: [Pays 100 if the FTSE closes below X between now and the close of trading today]
Intraday Double Up Bet: Buy this bet to play a market rise between two given hourly market times today. You will have the possibility to set the starting hour of the bet and the ending hour of the bet, and you will win double your stake if the market follows your prediction. Example: [Pays 100 if the FTSE rises between the starting time hour and the expiry hour]
Intraday Double Down Bet: Buy this bet to play a market drop between two given hourly market times today. You will have the possibility to set the starting hour of the bet and the ending hour of the bet, and you will win double your stake if the market follows your prediction. Example: [Pays 100 if the FTSE declines between the starting time hour and the expiry hour]
Run Bets: These fun bets are over in the space of less than a minute; so you can make money in seconds. Here, you have to guess the last decimal digit of say, the USD/JPY (predict 3rd decimal place) after 5 ticks.
