"The issue is right now the market is pricing in all these policies and reforms (will) happen, and if we can’t even sort out whether or not the government is operating, we are not going to get to those," said Amy Wu Silverman, equity derivatives strategist at RBC Capital Markets in New York. "I'm just very skeptical."
If she is right, volatility could spike and catch traders off guard. In that case, Silverman recommends using put options on the S&P 500 index that expire May 5 as a hedge.
Put options convey the right to sell shares at a fixed price in the future.
The average decline for the S&P 500 during government shutdowns is 0.6 percent according to Ryan Detrick, senior market strategist at LPL Financial in Charlotte, North Carolina.
During the 16-day shutdown in 2013 the S&P rose 3.1 percent. However, the index fell in seven of the eight sessions leading up to the last shutdown, for a decline of 2.6 percent.
"If nobody suspects it, that is usually the time it has the greatest effect on the market," said JJ Kinahan, chief market strategist at TD Ameritrade in Chicago.
"Not to say (the shutdown) can’t happen, I just don’t think people are taking it as seriously."
This article was provided by Reuters.