So … today’s the big day.

The next-to-last Federal Open Market Committee meeting of 2025 wraps up this afternoon with a much-anticipated rate decision that may or may not be what the market wants to hear. 

I’m still skeptical about another cut coming while economic data is so scarce, but never say never, right? 

Regardless of what comes out of the FOMC — the Fed’s policy arm — today, what they say and how they say it will set the tone for everything between now and the also-much-anticipated December rate decision.

That means today isn’t just about reacting. 

It’s about positioning.

And here’s what most traders are missing right now…

Consider the Context

Everyone’s been so obsessed with the “when” of a potential rate cut that they’ve ignored the reality that rate cuts often come with turbulence. 

The bond market might already be pricing in lower rates early next year, but when the Fed finally pulls the trigger, it’s usually because something is softening under the surface. 

That’s when markets stop floating higher and start rotating — fast.

If you’re trading options, this is your edge. 

All you need to do is understand how the market behaves before and after a decision like this because of the opportunities it can hand you.

For example, heading into today, I’ve been looking for ways to stay long without paying through the nose. 

Some of the lagging sectors like financials or healthcare are still offering setups at decent prices. You can get into directional call spreads for pennies on the dollar compared to where tech names are trading. 

If you’re in the “no news is good news” camp — meaning the Fed holds steady and keeps the tone neutral — selling put spreads on strong post-earnings names can work well. 

Implied volatility is still elevated into the FOMC event, so if the market doesn’t get shaken up, those premiums should deflate quickly in your favor.

Now, if you’re the type thinking about straddles or strangles, be careful. 

Unless you believe Jerome Powell is going to throw a wrench into things with a hawkish surprise or hint at December fireworks, the juice is probably too expensive. 

A flat Fed statement followed by a boring press conference will bleed those premiums in a hurry.

Eyes on This Outlier

What I’m watching most closely is what comes after the announcement, in the next couple sessions when traders start repositioning based on Powell’s tone.

If he leans dovish and signals that rate cuts are coming sooner rather than later, there’s a good chance tech catches another bid. 

But that trade is crowded. Everyone’s already stuffed into the same handful of names.

If we get a dovish tone and the market rips higher, I’d rather look at sectors that haven’t moved yet. That’s where the reward/risk skews in your favor. 

And if Powell stays firm, or surprises to the hawkish side, you’ll want to have some downside protection. Long SPY puts 30 to 45 days out, or even cheap long VIX calls, give you coverage without having to guess the exact timing.

And while all that’s happening, there’s one more thing I’ve got circled on the calendar:

Nvidia’s earnings on November 19.

Most of the mega-cap tech names have already reported this earnings season. 

We’ve heard from Apple, Microsoft, Meta, Google — the whole gang. But Nvidia is arguably the most important of the “Magnificent Seven” right now, and they haven’t said a word since August.

They blew the doors off in that last report. Beat expectations, raised guidance, lit a fire under the entire AI trade. 

Now they’ll be back in the spotlight just a short time before the final Fed meeting of the year December 9 and 10.

The timing couldn’t be more interesting.

Expectations are sky-high, maybe too high, so you’ve got three full weeks to prepare. 

You can start looking at calendar spreads now, while implied volatility is still reasonable. 

Or, if you think the hype’s overdone and the market could start pulling money out of AI leaders like NVDA, this is your chance to quietly build a position that benefits if the shine starts to fade.

Bottom line: This isn’t the time to sit on your hands. 

You’ve got the Fed today, another rate decision in December, and Nvidia earnings right in between.

Three major catalysts and plenty of noise. Even more opportunity.

So the question isn’t, “What’s the Fed’s going to do?” 

The question is, “What are you going to do about it?”

Stay street smart,
Jeff Zananiri

P.S. Ladies, it’s time to claim your seat at the table. 

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It’s a space where you can connect, learn, and grow, exclusively for you. Signing up takes 15 seconds, and then you’re off and running! 

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*Past performance does not indicate future results. Not typical