The market is rallying and volatility is rising.
Traders are jittery as they prepare for the Federal Reserve’s latest announcement on Wednesday. And the questions on everyone’s mind are, will the Fed raise rates or not? And if so, by how much?
The general consensus is that we’re likely to see a 0.25% interest rate hike, with 0.50% being deemed too much in light of the recent bank failures.
If that happens, we could see the market rally again, as investors will see a 0.25% increase as a sign that the Fed is beginning to slow down the pace of its hikes.
Regardless of what happens, we can count on one thing…. Volatility will increase again.
And while volatility has created a difficult environment for those trying to buy and sell stocks, it’s been great for options traders.
Volatility pushes up the prices of options contracts… And right now, that’s where the money is — selling options and collecting the premium.
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Trade well,
Jack Carter
Jack Carter Trading
