Lesson

Macro print volatility | Options Educator

Watch CPI and FOMC scenarios hit the term structure before you trade.

In this lesson

Major Macro Events

• CPI and FOMC cause the biggest market moves
• Employment data affects Fed policy expectations
• GDP shows overall economic health
• Know the calendar - don't be surprised

The Term Structure of Volatility

• Normal = near-term IV lower than far-term
• Inverted = stress, near-term IV higher
• Events create 'humps' at specific expirations
• VIX above 20-25 signals elevated fear

Trading CPI and FOMC Events

• Macro events affect entire market
• CPI and FOMC can move markets 1-3%
• IV crush is less severe than earnings
• Wait for dust to settle before trading

Hedging with VIX Products

• VIX calls provide portfolio insurance
• Put spreads offer defined-cost protection
• Hedge when VIX is low (cheap insurance)
• Reduce hedges when VIX already elevated

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