Posted in
Daily Report
By: Tom Gentile
on May 1st, 2023
This Wednesday, we are going to get yet another interest rate hike decision from the Federal Reserve Open Market Committee (FOMC).
The decision will be either no rate hike or it will be another hike and for a certain amount.
The market activity for the underlying securities and the options will likely be pretty flat, especially the day of the announcement.
Depending on how one is positioned with their options trades Fed rate hikes decision can affect ones trades for the short-term, say the week, much like an earnings announcement does.
Then there is the aspect of it not being if they raise rates or by how much, but that they also have to say in the commentary to follow their decision regarding the health of the economy and how things look in there, what seems like never-ending battle to stave off inflation.
How Active to Be the Week of the Fed Announcement on Interest Rates
My team and I tend to scale back the amount of new options trades we choose to open on the week of the Fed announcements. At least that Monday to Wednesday. Post the announcement, once we get a gauge of the market direction from there we go back to normal and at least stay as active as we normally are.
Morning Reports Lists
Here is a look at the Morning Reports Lists the first of the trading week ending May 05, 2023.
I am not bringing this up for one to consider, but rather to at least see what options are seeing the various types of activity going into an announcement. This is where the options traders are making their decisions.
See what these look like now and post the Fed announcement check in on these to see what happened after, This gives you experience in options trading activity around a Fed announcement to help you better prepare and maybe know what to expect on future fed announcements.
App: Toms Option Tools
Market Insight articles may show images of lists of stocks meeting a variety of options parameters like Unusual Call and or Put activity or Expensive IV found on my app Toms Option Tools.
Other times I will have other charts may work to amplify my educational points.
Those options data lists, however, can be found on my app Tom’s Option Tools. Use your device to search up and download this app and get free access to the Morning Reports section of the app.
Other parts of the app are available at a premium subscription rate, but the Morning Reports Lists are yours free.
Disclaimers
Stock and options trading has large potential rewards, but also large potential risk.
You must be aware of the risks and be willing to accept them in order to invest in the stock and options market. Do not trade with money you cannot afford to lose.
This is neither an offer to buy/sell/ or recommend a particular stock or option.
Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been actually executed, the results may have under or overcompensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with hindsight.
No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.
Disclaimer of Warranties and Liabilities Tom Gentile and TomsTradingRoom, LLC including employees, consultants, and editors (“Publisher”) cannot and do not warrant the completeness or accuracy of the content found in our areas, or its usefulness for any particular purpose.
Tom Gentile and TomsTradingRoom, LLC also make no promises that our content or the service itself will be delivered to you uninterrupted, timely, secure, or error-free. Under no circumstances will Tom Gentile and TomsTradingRoom, LLC be liable for direct, indirect, incidental, or any other type of damages resulting from your use or downloading of any content on our site.
This includes, but is in no way limited to, loss or injury caused in whole or in part by our negligence or by anything beyond our control in creating or delivering any portion of Tom Gentile and TomsTradingRoom, LLC.
You are agreeing that you bear responsibility for your own investment research and investment decisions. You also agree that Tom Gentile and TomsTradingRoom, LLC will not be liable for any I, investment decision made, or action taken by you, or others based upon reliance on news, information, or any other material published by Tom Gentile and TomsTradingRoom, LLC.
Tom Gentile and TomsTradingRoom, LLC relies on various sources of information that we believe to be accurate and reliable. However, we make no claims or representations as to the accuracy, completeness, or truth of any material contained on our site.
Tom Gentile and TomsTradingRoom, LLC are educational portals, providing content for educational and informational purposes only. Neither Tom Gentile nor TomsTradingRoom, LLC are a broker/dealer. Investors need a broker to trade stocks and options and must meet certain requirements. All securities, futures, and investments data and ideas are offered to self-directed investors. All prices in USD unless noted otherwise.
A full disclaimer can be found here: http://www.tomgentile.com/legal_disclaimers.html.