editor 
Options markets are more worried that the S & P 500 will rise and fall sharply on Wednesday when the Fed makes interest rate decisions.MightygriffinmegawaysAnd the range is greater than on any similar occasion in the past year.
A parity straddle option strategy showsMightygriffinmegawaysOn Wednesday, when the Federal Reserve issued its interest rate decision statement and Chairman Jerome Powell held a press conference, the benchmark index of US stocks is expected to fluctuate by 0.Mightygriffinmegaways.95%. Data compiled by Citigroup show that the last time traders expected such a big volatility in FOMC decision day was in May 2023.
Driven by privacy such as the overall mixed earnings season, rising geopolitical uncertainty and concerns that the Fed will keep interest rates high for longer, traders expect a stronger reaction from the stock market after the interest rate decision is announced. The S & P 500 index fell 4% in April.Mightygriffinmegaways.2%, the worst performance since September last year.
Citi strategists say options traders have been underestimating the volatility of the S & P 500 on the Fed's decision-making day. The intraday volatility of the S & P on every Fed decision day since the beginning of 2022 has been greater than expected by the straddle options strategy.