SPY S&P500 ETF Options ahead of the FED Interest Rate Decision

16. Sept. 2023

The latest Consumer Price Index (CPI) report this week has shown inflationary pressures, with a 0.6% month-on-month increase in CPI, in line with expectations. Additionally, the core CPI, which excludes volatile food and energy prices, also saw an uptick, rising by 0.3% month-on-month, above expectations at 0.2%.

On a year-on-year basis, CPI has surged to 3.7%, surpassing the anticipated 3.6%. Moreover, core CPI, at 4.3% year-on-year, has held steady as per expectations.

These numbers underscore the persistent inflationary trend we have been witnessing. Such elevated levels of inflation can be concerning for financial markets, as they often lead to higher interest rates. With the upcoming FOMC meeting, there is speculation of another 0.25 basis points rate hike, which would further tighten monetary policy.

In light of this, I`m considering the following Puts: September 29, 2023 expiration date, $440 strike price, and $2.25 premium, to align with the bearish sentiment. This strategy could potentially be prudent given the expected market conditions. However, it is crucial to remain vigilant, as market reactions to FOMC decisions can be unpredictable and swift.

Looking forward to read your opinion about it.

21. Sept. 2023

Trade geschlossen: Ziel wurde erreicht

The U.S. Federal Reserve maintains the benchmark interest rate, yet suggests the likelihood of another increase in the near future.
The Puts that I mentioned went up from $2.25 (when I wrote this article), to $9.41 at the close today, for a fantastic 4.18X gain!
Congrats to those who bought the puts!