What are options markets signaling ahead of Fed meeting? | Presented by CME Group

Option premium or implied volatility changes with market conditions. When the market is more rangebound without much economic data, earnings and/or other potential risks in the near term, we typically see lower premiums. But when a binary event like an earnings release or other potential market making announcements are ahead of us, option premiums rise.This is because of the age-old definition of supply and demand. Typically, the market will experience increased volatility ahead of an upcoming FOMC meeting ...