Considering the FOMC meet, traders may position themselves in | The Financial Analyst
Considering the FOMC meet, traders may position themselves in the following ways in accordance with their risk appetite:
1. Build Long Straddle/ Long Strangle (High Risk) 2. Secure existing positions through hedging (Moderate Risk) 3. Square off all positions and enter in fresh trades once the comments are delivered (Low/No Risk)
I'll firmly suggest option sellers to "avoid" carrying any overnight positions until the comments of the FOMC meet are delivered. Also, if you choose to build a long straddle/ long strangle, prefer choosing the month end or later expiry.
Ps: The risk levels defined are w.r.t the FOMC meet and are subject to change on further development of the market scenario.
