Some traders with buy positions may have responded immediately to the central bank’s intervention by selling futures contracts. Why would some speculators with buy positions leave their positions unchanged or even increase their positions by purchasing more futures contracts in response to the central bank’s intervention?
Added by Margaret A.
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Central banks often intervene in markets to stabilize or influence prices, which can create expectations of future price movements. Traders may interpret this intervention as a signal of future price increases. Show more…
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