Traders in the US interest rate options market are still betting on at least one mega-rate cut by the Federal Reserve this year, although it may not happen before the November 5 presidential election. With next week's FOMC meeting just around the corner, at first glance Fed swap contracts reflect expectations of a 25 basis point cut, and the probability of a larger cut is slim. But a closer look is another matter. Recent options activity related to the secured overnight funding rate suggests that traders are increasingly positioning for a rate cut of about 150 basis points ahead of the Fed's January 29 policy decision. This is the same as what the swap market is currently digesting. To achieve this, without an intermeeting rate cut, policymakers would have to implement at least a half-percentage-point cut in two of the four meetings before January.