The most volatile week of June: SpaceX options listing, Kevin Warsh’s first FOMC meeting as chair, and triple witching

Three major events will dominate the market this week:

1. SpaceX optionsgoes live on Tuesday

2. Kevin Warshfirst FOMC meeting as chair will hold a press conference on Wednesday afternoon Eastern Time

3. Thursday marks triple witching 。

Any one of these events could trigger significant volatility, and with all three occurring in the same week, they may lead to sharply heightened market swings.

SpaceX shares continued to rise after listing, with options officially launching on Tuesday

$SpaceX (SPCX.US)$closing up 19% on its debut day and maintaining an upward trend over recent days. On June 16, its intraday market capitalization briefly surpassed $3 trillion, making it the fifth-largest publicly traded company in the U.S. Options trading began on Tuesday, and Cboe has publicly stated it is prepared for surging demand. Trading in SpaceX options exploded immediately upon market opening,with call option volume nearing one million contracts, ranking fifth nationwide, placing it alongside NVIDIA and Tesla, reflecting investors' highly speculative enthusiasm for this Musk-owned space company.

However, it is also worth noting that some institutional investors are simultaneously establishing hedging positions.On Tuesday, several large-scale "collar" trades were executed—buying put options to protect against a decline in the stock price while selling call options to offset hedging costs, albeit at the expense of capping some upside potential.According to the co-head of derivatives strategy at Susquehanna Investment, the expiration dates of these trades align closely with the end of SpaceX's stock lock-up period, suggesting they are likely hedges against unlock-related risks.

Learn more:Long collar strategy

As the FOMC meeting unfolds, what signals will newly appointed Waller send?

Waller will hold an FOMC press conference on Tuesday afternoon Eastern Time (early Wednesday morning Beijing time). The market is also watchingwhether the Federal Reserve will cut interest rates. The bigger question ishow Waller will handle the interest rate dot plot.He spent a decade arguing that the Federal Reserve’s release of interest rate projections constrains policymakers’ room to maneuver. If he pauses or weakens the dot plot disclosure on Wednesday, it would mark the biggest shift in Fed communication since 2008—a risk not yet priced into markets: U.S. inflation has rebounded to a three-year high of 4.2%, and against this backdrop, eliminating forward guidance would strip risk assets of their safe-expectation cushion.

Amid heightened uncertainty, the market’s reaction to the broader index appears somewhat muted:Implied volatility (IV) stands at 16.25%, with an IV percentile of 36%, as volatility expectations have eased somewhat amid developments in U.S.-Iran tensions., with some market participants viewing this FOMC meeting as potentially 'routine,' though potential black swan risks must also be considered. Currently, $S&P 500 Index (.SPX.US)$the put/call volume ratio stands at 0.99, and the open interest ratio is at 1.39, indicating substantial capital deployment into put options to hedge against downside risk in the broader market.Several scenarios need to be considered under these circumstances:

Scenario A: Warsh downplays the dot plot or delivers a hawkish message

Shock scenario: Quantitative algorithms unwind long positions, implied volatility surges, and high-beta stocks lead the decline.

Countermeasures: Buy index ETFs (e.g., $Invesco QQQ Trust (QQQ.US)$ 、 $SPDR S&P 500 ETF (SPY.US)$Wait) ofbear put spread. This strategy features limited downside risk, capped costs, and does not require precise timing of the market bottom. Since the premium received from selling options can partially offset the time-value decay of the purchased options, the initial setup cost is favorable.

Scenario B: Warsh remains neutral with no unexpected remarks

Base case scenario: A rebound occurs after data release, implied volatility drops sharply, and the remainder of the week focuses on positioning ahead of Friday’s option expiration.

Response approach: Consider taking advantage of declining volatilityIron Condor options strategy。The logic behind this strategy is straightforward: simultaneously sell a call and a put to profit from time-value decay as implied volatility declines, while buying a call and a put on either side to cap the maximum loss on the short option positions.

Scenario C: Warsh leans dovish

Given his track record, this outcome is unlikely, but it remains plausible if he aims for a smooth and uneventful debut. In this case, equities rally sharply, the U.S. dollar weakens, and high-beta stocks lead the advance.

Countermeasures:Bull call spread. If you already hold the underlying asset, you can also sell a call during an uptrend to create a covered call strategy.

Triple Witching Day is here again! The options market may face heightened volatility.

Triple Witching Day refers to the quarterly derivatives expiration day in the U.S. stock market, occurring on the third Friday of March, June, September, and December each year. On this day, stock index futures, index options, and stock options—all with quarterly expirations—expire simultaneously. BecauseU.S. markets are closed this Friday, so Triple Witching Day naturally shifts to Thursday (June 18), one day earlier.

How will the market perform on this day?All contracts must be decided for exercise, closed, or rolled over before the market closes, leading to a significant spike in trading volume in the short term. Prior to options expiration, market makers often find themselves in a 'net long gamma' position amid large-scale selling of index options, suppressing volatility by 'buying on dips and selling on rallies.' However, once these contracts expire, this suppressive force weakens, making it easier for the market to amplify fluctuations. Particularly in the last hour before the close, it is usually the period with the most intense market volatility and highest trading volume of the day.

According to Reuters statistics,Over the past year, the average weekly volatility of the S&P 500 in the week following monthly options expiration was approximately 2%, higher than the 1.5% for regular weeks.Meanwhile, for popular stocks like Nvidia and Tesla, as much as a quarter of open interest contracts are sometimes settled on the expiration date.

Related Reading:Worth bookmarking! Your 2026 options trading calendar guide: Beyond market holidays, these dates will determine your profits and losses.

Does this mean that the market is more likely to rise or fall? In fact, Triple Witching Day itself does not determine whether the market goes up or down.Although there is considerable volatility, the direction remains uncertain. If the market sentiment is optimistic, it will fluctuate upwards; if concerns arise, it will fluctuate downwards. Therefore, the risk of Triple Witching Day lies not in an inevitable decline, but in unexpected fluctuations, especially when combined with other market hotspots, resulting in even greater volatility.

However, today's Triple Witching Day may no longer have the same impact as it did more than two decades ago. Back then, the market only had futures/options expiring quarterly, with all pressure concentrated in a single day, occasionally causing significant fluctuations. But now, exchanges have introduced monthly, weekly, and even daily expirations for various options, effectively dispersing what used to be concentrated on one day.

However, amid heightened market uncertainty recently, Triple Witching Day could amplify an already unstable directional bias, and the day’s settlement and delivery processes may inject even greater volatility into the market.

1. If you hold underlying shares and are concerned about short-term volatility risk,

you should take full advantage of options’ ability to protect your positions.Buy put optionsIf the stock price falls, this option can hedge against downside risk in your position for a certain period.

2. If you want to trade the potential volatility around Triple Witching Day but are uncertain about its direction,

you can buy both a call and a put option simultaneously, creating aLong Straddle/Strangle strategyIn this strategy, the call and put positions hedge against movements in the underlying stock price, and profits are primarily derived from an increase in time value due to rising implied volatility.

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Option Risk Warning:An option is a contract that grants the holder the right—but not the obligation—to buy or sell an underlying asset at a predetermined price on or before a specified date. Option prices are influenced by multiple factors, including the current price of the underlying asset, the strike price, time to expiration, and implied volatility. Implied volatility reflects the market’s expectation of future price fluctuations over the life of the option and is derived by reverse-engineering the Black-Scholes pricing model. It is commonly used as a gauge of market sentiment. When investors anticipate greater volatility, they may be willing to pay higher premiums for options to hedge risk, leading to elevated implied volatility. Traders and investors use implied volatility to assess the relative attractiveness of option prices, identify potential mispricings, and manage risk exposure.

Disclaimer:This content does not constitute any offer, solicitation, recommendation, opinion, or guarantee of any securities, financial products, or tools. The risk of loss in trading options can be substantial. In some cases, losses may exceed the initial margin deposited. Even if you set contingent orders such as 'stop-loss' or 'limit' orders, these may not prevent losses. Market conditions may make such orders unexecutable. You may be required to deposit additional margin within a short period. If you fail to provide the required amount within the specified time, your open positions may be liquidated. However, you will still be responsible for any shortfall in your account. Therefore, before trading, you should study and understand options and carefully consider whether such trading is suitable for you based on your financial situation and investment objectives. If you trade options, you should be familiar with the procedures for exercising options and the rights and obligations upon exercise and expiration. Options trading carries extremely high risks and is not suitable for all investors. Investors should carefully readCharacteristics and Risks of Standardized Options。

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