Options markets are predicting a 0.78% move for the US nonfarm payrolls report on Oct. 3 and a 0.72% move for Wednesday’s Fed rate decision. Traders are keeping an eye on the upcoming jobs data, as well as the quarterly triple-witching options expiry event happening Friday.

The Fed is expected to cut interest rates on Wednesday, with a 25 basis-point rate cut already priced in. Investors are eagerly awaiting Fed Chair Jerome Powell’s press conference for clues on future rate cuts. The focus is on employment data to determine the speed and depth of US interest rate reductions.

If the jobs data deteriorates further after an increase in US weekly unemployment claims, it could prompt a faster rate of rate cuts. While this may initially boost the market, it also raises the risk of a potential selloff. Emergency rate cuts historically lead to positive intraday market returns but negative medium-term returns.

Friday’s triple-witching options expiration event is being downplayed by market watchers, but it could still impact market movements. Intraday swings in the S&P 500 Index on expiry weeks have historically been slightly higher than the following week. The “free to move” theory suggests markets are more volatile when dealer options positions expire, leading to more significant market swings.

Overall, volatility traders are gearing up for a potentially eventful week with the Federal Reserve meeting, jobs data, and options expiry all on the horizon. The market is bracing for potential rate cuts and employment data that could influence future Fed decisions and market movements.

Read more at Yahoo Finance: Options Traders Craving Volatility Look Past Fed to Jobs Data