How to tell if traders care about the FOMC on Wednesday

BY ANDREW GIOVINAZZI

September 12th, 2025

Yo Pit Crazies,

 

It’s always good to get some signals—and right now, Mark’s AI tool is flashing a few you’ll definitely want to check out. At the same time, the Fed Funds Rate is sending its own message: the market is fully convinced a rate cut is coming, thanks to signs of a softening economy.

 

I can show you how we know the market is 100% convinced—beyond just looking at the Fed Funds Rate probabilities.

 

And trust me, this method is far more reliable.

SIGMA Volatility for SPDR S&P 500 Trust ETF (Ticker: SPY) is at a year low

Yup, you heard it here first—SPY volatility for next week’s daily options is now in the single digits. The Fed may speak on Wednesday, but traders have already made up their minds: the rate path looks clear. We’re likely looking at cuts over the next year—my guess? A quarter-point per meeting.

Over the past year, these Sigma Vols have spiked to 20 or higher ahead of FOMC decisions. But now, traders aren’t willing to pay anything for calls or puts going into next week.

 

This could mark the end of the extended volatility cycle we’ve been in since last year. We still haven’t seen the VIX drop into Zone 1—the 13 handle or below—but getting short-term implied volatility down to 9.27 is a strong start. I’m expecting even lower VIX readings by the end of the week.

 

We’re already positioned for it in Weekly Profit Cycles.

 

Tally ho!

 

To Your Trading Success,

Andrew Giovinazzi

Andrew Giovinazzi

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About the Author

Andrew Giovinazzi

Andrew Giovinazzi

Former CBOE floor trader and CIO at Karman Line Capital. Author of ‘The Option Traders Hedge Fund’ with over 30 years of options trading experience.

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