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2025-09-17 18:26:27
[Hidden Secrets in GBP Options: Fiscal Risks Remain] ⑴ Implied volatility in GBP/USD options climbed again this week, in line with the weakening USD. However, it is noteworthy that these increases occurred after a pullback from early September highs. ⑵ The initial increase occurred as sterling fell amid growing UK fiscal concerns. While these concerns have recently eased, leading to a rebound in sterling, their potential impact remains. ⑶ Options expiring through 2026 continue to exhibit volatility and a bearish bias for the pound. Market demand persists for options covering the first and second quarters of 2026, particularly for sterling put options. ⑷ The UK Treasury's budget announcement, scheduled for November 2026, is expected to set the tone for the pound's long-term trajectory. Current data suggests that market participants remain wary of future pound volatility and are seeking tools to hedge against potential downside risks.
