Nervous currency traders are paying the most in eight years for insurance against a plunge in the dollar.

With the Federal Reserve expected to hold interest rates steady Wednesday, traders in the $5.1-trillion-a-day currency market are paying an added premium for the first time since October 2009 on options to protect against an extreme decline in the dollar against the euro over a six-month tenor. One measure, known as a 10-delta risk reversal, is an indication of trader bias in the options market, which currently reflects expectations that any move in the euro would be dramatic.

What's more, investors are piling into options contracts in anticipation of big moves in the euro-dollar exchange rate, keeping an eye on whether the pair breaks above the key $1.1714 level, the high from August 2015. Traders bought more than $6 billion in options to sell dollars and buy euros on July 20 and 21, and an additional $3 billion to sell the greenback against the yen, according to Depository Trust Clearing Corp. data.