We are all perfectly aware that the FOMC is due to release a policy statement this week. The ECB chairman is scheduled to speak on the same day. As traders move back and forth on the probability for a rate hike in the US, the market is setting itself up for some increased volatility. While this is a concern to all traders, it is of particular concern to options traders.
In the video we will talk about how a trader may treat this run up in volatility before the announcement, mid-week. Specifically, I will look at the progress made on the short straddle entered at the beginning of last week. Volatility is something that can help and hurt the options trader and knowing how to deal with it effectively is a requirement for success.
