The Finale Super-Week 2025! All Eyes on NFP! 0DTE & Weekly Options Playbook for Tuesday’s Jobs Print
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On Tuesday before the market open (8:30 a.m. ET), the highly anticipated U.S. Nonfarm Payrolls (NFP) report will be released. Today, we’ll look at how to position 0DTE or weekly options.
Because of the earlier government shutdown, the October employment report was canceled and will be rolled into the November release. Meanwhile, the October Household Survey was not conducted and cannot be reconstructed, so this report is likely to be noisier and more market-moving than usual, which in turn creates more trading opportunities.
At the moment, the market is expecting November payroll growth to come in at a soft +35K to +40K range; the unemployment rate is generally still priced around ~4.4%. For average hourly earnings, the economic calendar consensus is pointing to about +0.2% MoM.
Last Friday’s selloff wiped out December’s gains for both the Nasdaq and the S&P 500. The Nasdaq—dominated by AI, semis, and tech—fell 1.7% in a single session, sliding back toward its 20-day moving average (MA20), leaving the near-term trend far from clear. By contrast, the Dow kept printing fresh highs, barely affected.
The market’s core narrative right now is : the AI bubble is leaking, the Fed will deliver only one rate cut in 2026, commodities are rising, the U.S. is not heading toward deflation, and traditional “old economy” sectors are recovering.
That’s why I think the “best-case” version of this report is still a Goldilocks print—not too hot, not too cold. A result that is in line with expectations or slightly below is likely the version the market can digest most easily. A big upside surprise or a major downside miss, on the other hand, would both be highly disruptive.
Right now, the implied volatility (IV) term structure for SPX weekly options expiring this week shows a clear pattern:
(1) calls are priced with higher IV (18~19), puts with lower IV (13~14), and
(2) the absolute IV levels on both sides of the upfront weekly chains (12.19) are meaningfully higher than those for options expiring next Monday (12.22).
For next Monday’s (12.22) expiry, call-side IV is broadly around 14–15, which is more in line with the VIX, while put-side IV is around 11–12, roughly 4~5 points lower than this Friday’s expiry. This suggests the market is still to a meaningful extent paying up for this week’s risk.
Statistically speaking, for short-dated S&P 500 options with 1–2 weeks to expiry, a 4~5 points move higher or lower in IV often translates into an option price move of roughly 25–30%. In other words, if the index level stays roughly unchanged but IV falls, that’s generally favorable for sellers; if the index makes a large move—meaning IV is less likely to collapse—then that tends to be favorable for buyers.
So in practice, positioning into NFP is ultimately a debate between directional and direction-neutral setups. If you expect a large post-release move, you want to be an option buyer; if you expect limited movement, you want to be an option seller. And among buyers, you can either bet on a one-way move with a simple long call or long put, or if you are not confident of the direction, you could use a long straddle.
1 Directional
Unlike many standard options tutorials, I don’t recommend a double-OTM (out-of-the-money) long strangle here. If you’re betting directionally, the most robust approach is a double-ITM (in-the-money) long straddle. The reason is the inherently high-risk nature of near-expiry / weekly options.
Over a one-week horizon, the index’s trading range often isn’t that large, which means a double-OTM structure can easily end up with both legs expiring worthless—especially if the strikes are more than 3% away from spot (i.e., moderately out-of-the-money). By contrast, if you go double-ITM, even if you’re wrong, one leg is unlikely to go completely to zero, which helps preserve part of your capital.
If a double-ITM straddle is too expensive, at minimum you should use a double-ATM (at-the-money) straddle. That way, even a modest move in either direction helps reduce the risk of one leg being wiped out entirely.
2 Direction-neutral
A direction-neutral setup aims to profit from IV mean reversion and/or premium decay, potentially all the way to expiration. Given that near-expiry / weekly options carry limited premium to begin with, you shouldn’t expect to get rich selling a short strangle—once you properly cap the risk, you’re generally earning small amounts with high probability, then compounding that over repeated trades.
Since the goal is to earn small, high-probability gains, the strikes should be set as far away as possible, well beyond the range the index is likely to travel within a week. Using the S&P 500 as an example, strikes should be about 3–5% away from spot. For more aggressive traders, think ~3%; for more conservative traders, ~5%. As long as the index does not experience a one-way shock move within the week, you can collect the premium into expiry.
3 Pair trading
As mentioned earlier, there’s a clear divergence across indices right now—the Dow is strong while the Nasdaq is weak. That makes pair trading another viable approach: call the Dow, put the Nasdaq. For strike selection, more conservative traders can use ITM or ATM options, while more aggressive traders can try ~2% OTM strikes. The ideal outcome for a pair trade is Dow up and Nasdaq down; but even if both indices rise or fall together, one side can still generate profits that help offset losses on the other.
Note: The images shown in this article—including the option expiration dates and strike prices displayed—are for illustrative purposes only, intended to help readers better understand the payoff profiles of the option strategies at expiration, and do not constitute investment advice.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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Shaaaw : I’ll definitely try that next time. Thanks for breaking it down!
Singh Rahul : Finally, someone explaining pair trading in a way that clicks! I’ve been eyeing the Dow vs. Nasdaq divergence for weeks but wasn’t sure how to structure it.
Rockyturki : Love the direction-neutral approach—perfect for my low-risk style.
Daring Lu : Run
sunwu79 :![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
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