Recent NDX FOMC Reactions More Like Non-Reactions

One of the beautiful things about the option market is you can trade bullish, bearish, and neutral outlooks. Many Nasdaq-100 (NDX) option traders will approach scheduled announcements like Wednesday afternoon’s FOMC decision from a neutral standpoint due to option sellers benefiting from smaller than average price changes on FOMC day. The chart below shows the NDX price change for the last twelve FOMC announcements.

The average price change for NDX over the past twelve FOMC announcements is +/-0.98%. However, note that most of the large moves that contribute to this average occurred in 2024. In 2025, there was only one NDX move over 1% (March 19) and the average NDX change on FOMC day in 2025 was +/-0.39%, much lower than the average move for NDX on all days in 2025 of +/-0.96%.

Option pricing has adjusted based on this recent history. The next chart shows the NDX 1-day ATM straddle price on the close the day before each FOMC and the cash settlement value on FOMC announcement day.

The last time NDX moved more than was priced by the ATM straddle was December 2024. Since then, the straddle overpriced each move in 2025. Even the 1.30% move in March 2025 was slightly overpriced (271.15 vs. settlement of 256.66).

Finally, the table below summarizes NDX reactions to the last twelve announcements.

A consistent ATM straddle seller would have profited nine of the last twelve FOMC announcement days. The sum of profits is 182.86 but do note that as recently as December 2024 there was a substantial loss of over 500 points in a single day, so that profit would have come with some significant drawdowns.