Preparing for Volatility: Stock Options Traders Eye U.S. Jobs Report
Market Anticipation for U.S. Jobs Report
Stock options traders are preparing for a volatile session on Friday as the U.S. jobs report is scheduled for release at 8.30 a.m. ET.
Impact of Straddle Strategy
A chart from a team of analysts at Citigroup shares insights on a popular options strategy known as a straddle. This strategy involves buying an at-the-money put option and an at-the-money call option with the same expiration date and strike price. Traders employing this strategy need to see a 1.1% swing in either direction to break even.
- The strategy is profitable if the underlying asset moves significantly enough.
- Past data shows actual moves on jobs day often exceed traders' expectations.
Market Reaction Ahead of the Data
As the Citi team points out, the anticipated volatility is heightened by recent trends. U.S. stock index futures were modestly higher, with S&P 500 futures hinting at a 0.3% gain at 5,766 before the report's release.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.