Should I trade iron condors on FOMC days and other high-volatility events?
VixShield Answer
Federal Open Market Committee (FOMC) announcement days are among the highest-volatility sessions of the year for SPX. The same applies to CPI, PPI, NFP (jobs report), and major geopolitical events. These are the sessions when the market's actual daily move can be 2–3x the normal expected range.
The VixShield framework treats scheduled high-volatility events with a clear protocol:
Option 1: Skip the session. If the event premium does not justify the risk (meaning the available credit does not meaningfully increase despite higher implied volatility), passing on the day entirely is legitimate. Preservation of capital beats forced participation.
Option 2: Reduce size and widen strikes significantly. On FOMC days, implied volatility rises sharply in advance, causing the EDR to widen. RSAi™ will recommend strikes that reflect this wider expected range. If the credit at those wider strikes still meets minimum thresholds, a half-size trade is reasonable.
Option 3: Trade post-announcement only. Wait for the Fed announcement, observe the initial reaction, then enter a 0DTE trade in the final 2 hours using the post-announcement range as your reference. This eliminates directional event risk while still capturing end-of-day theta.
💬 Community Pulse
FOMC day trading debates are common on r/thetagang. Half the community avoids all event days; half trades them for the rich premium. VixShield's framework is nuanced: premium richness alone does not justify a trade if the risk is disproportionate. Having a structured decision process — rather than improvising on event day — is what makes the difference.
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