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Traders Scrap Bets on November Fed Move as Historic Short Cracks
A massive wager that the Federal Reserve would raise interest rates again in November is in full-blown collapse. A record amount of risk had accumulated in CME Group Inc.’s federal funds futures contract for November in recent weeks, driven by interest in short positions that would benefit from a rate hike by the central bank on Nov. 1. The contract is used to wager on monthly average levels of the interest rate the US central bank sets a target range for. Open interest, the number of contracts in which traders had positions, reached 771,500 on Oct. 17, equivalent to $32 million per basis-point move in its price. ... (full story)