Bank of America: Market Underestimating Possibility of Volatility Before and After Nonfarm Payrolls

Ohsung Kwon, a stock and quant strategist at Bank of America, believes, “As long as inflation is controlled, stronger job growth should also be favorable for the stock market.” However, Bank of America’s strategy team anticipates volatility in the market before and after the report is released, and they believe the market is underestimating the possibility of market volatility. Bank of America recommends using a straddle option strategy as a way to take advantage of potential market volatility. This strategy involves buying both put options and call options on the S&P 500 index with the same expiration date and strike price.