Non-farm payroll data released pre-market! Want to trade on market volatility? Extended trading hours for index options have got you covered!

Have you ever encountered the following situations in options trading?

1. The Non-Farm Payrolls (NFP) data is released at 8:30 p.m. ET, causing significant market volatility. You’re eager to enter an options trade at the market open to capitalize on the trend, only to find that the stock price movement has already been absorbed during the pre-market session. By the time the regular session opens, the momentum has weakened, making it difficult to get in.

2. You bought a call option ahead of the CPI data release. After the announcement, the stock price surged, and you were excited to hold until the market open to sell for a profit—but the stock had already peaked and pulled back in the pre-market. At the open, you found your call option’s gain fell short of expectations.

Observant fellow investors may have already noticed that when you open $S&P 500 Index (.SPX.US)$ the options chain interface, option quotes are already updating during the pre-market session,Could it be that options can now be traded outside regular market hours?

That’s right! Extended-hours trading is now available for certain index options! Even during off-hours market moves, we can respond promptly and take action.

Currently supported underlying assets for extended-hours options trading: $S&P 500 Index (.SPX.US)$ , $Mini Standard & Poor's 500 (.XSP.US)$ , $CBOE Volatility S&P 500 Index (.VIX.US)$ , $Russell 2000 Index (.RUT.US)$

Supported trading hours (ET, daylight saving time):

Pre-market session: 8:15 p.m. – 9:25 a.m. ET

Regular trading hours: 9:30 a.m. – 4:15 p.m. ET

After-hours trading: 4:15 p.m. – 5:00 p.m. ET

For details, see the Cboe website: https://www.cboe.com/about/hours/us-options/

However, please note: expiration-day options expire at the close of regular trading and cannot be traded during the after-hours session—this is critical to remember!

Options Market: How to Strategically Position for Both Offense and Defense

The non-farm payrolls data will be released tonight at 8:30 p.m. ET, with market consensus expecting an increase of 80,000 jobs and the unemployment rate holding steady at 4.2%, indicating relatively weak performance.

From the options market perspective, the .SPX options market shows mixed sentiment, with a put/call volume ratio of 0.96 and an open interest ratio of 1.34. However, current implied volatility (IV) remains relatively low, suggesting that significant post-NFP moves are not yet priced in.

.VIX is currently at a low level. Its options’ put/call volume ratio stands at 0.48, open interest ratio at 0.38, and IV at 156.60%, which is elevated,with the market anticipating a rise, signaling an expectation of heightened volatility.

1. Before the Non-Farm Payrolls (NFP) release: Focus on hedging risk

Although market activity is currently relatively muted, the NFP data could still influence market expectations and weigh on the broader market. To protect your portfolio from potential market-wide moves, you can leverage the properties of optionsby establishing a put option on .SPX in advanceto hedge against potential downside risk.

Similarly, when market volatility intensifies, the Volatility Index (.VIX) typically rises in tandem. You can also considerestablishing a call option on .VIX in advance. If market panic escalates and .VIX rises, gains on the call option can partially offset your losses.

2. After the NFP release

1) If a clear directional trend emerges: It is recommended touse spread strategiesFollow the trend

Trading principle: Wait 15–30 minutes for the initial price impulse to settle, filter out false breakouts, then enter a position. Avoid 0DTE (same-day expiration) options due to rapid time decay; prefer lightly out-of-the-money options expiring in 7–21 days.

Although .SPX currently has low implied volatility (IV), single-leg options still suffer significant time decay. It is advisable to add a short option position to hedge against time decay.

Example: If bullish on the market, open a bull call spread.

(The design images shown on screen are for illustrative purposes only and do not constitute any investment advice or guarantee; market conditions change rapidly, and displayed prices may not reflect actual market values.)

2) In the event of a false breakout—for example, a sharp drop followed by a rebound, or a surge followed by a plunge

Trading principle: Do not chase prices blindly; wait for the price to return to its consolidation range before initiating a position.

For example, you coulduse a short straddle strategybetting that the stock price will stay within your profit range, thereby collecting the option premium.

If concerned about the high two-sided risk of short strategies, you can add long legs on both sides to cap maximum loss, such asIron Condor strategy。

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Options Risk Disclosure: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; it is derived by reverse-engineering the Black-Scholes pricing model and is commonly viewed as an indicator of market sentiment. When investors anticipate higher volatility, they may be willing to pay more for options to hedge their risk, resulting in higher implied volatility. Traders and investors use implied volatility to assess the attractiveness of option prices, identify potential mispricings, and manage their risk exposure.

Disclaimer:This content does not constitute an offer, solicitation, recommendation, opinion, or any form of guarantee regarding any securities, financial products, or instruments. The risk of loss in trading options can be substantial. In certain circumstances, your losses may exceed the initial margin deposit. Even if you place contingent orders such as 'stop-loss' or 'limit' orders, there is no assurance that losses will be avoided, as market conditions may prevent execution of these orders. You may be required to deposit additional margin on short notice. If you fail to meet such margin calls within the stipulated time, your open positions may be liquidated. You remain fully liable for any resulting deficit in your account. Therefore, prior to trading options, you should thoroughly research and understand how options work and carefully consider whether such trading aligns with your financial situation and investment objectives. If you trade options, you should become familiar with the procedures for exercising options and handling expiration, as well as your rights and obligations upon exercise or expiration. Options trading involves significant risk and is not suitable for all investors. Investors should carefully read"Characteristics and Risks of Standardized Options"。

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