“Priced in” refers to market conditions where current prices already reflect available information, expectations, or anticipated events. When information is fully priced in, markets may not react significantly to the actual event occurrence. Understanding what is or isn’t priced in helps identify trading opportunities and assess market efficiency.

Market efficiency theory suggests that prices quickly incorporate new information, making it difficult to profit from publicly available data. However, markets may incompletely price in complex information or future probabilities, creating opportunities for informed traders. Assessing what’s priced in requires understanding market sentiment and expectation levels.

Real-world example: Federal Reserve rate hikes may be “priced in” when bond yields already reflect expected policy changes, causing minimal market reaction to actual rate announcements that match market expectations rather than creating surprise movements.