Free Trial

SocGen See Value in GBP/USD Options

GBPUSD
  • SocGen see GBP/USD options as cheap amid a surge in realised vol in the pair. They see a risk that the pair moves toward 1.30 much faster than anticipated by their internal forecasts, with GBP/USD already breaking free from monetary policy expectations.
  • As such, an early bullish move that is due solely to November’s dollar weakness. If the next leg comes from sterling strength, GBP/USD could go much higher.
  • Due to the large negative vol risk premium, they see GBP/USD options as very attractive, especially to buy convexity, both in directional and volatility terms. They recommend buying a 2-month GBP/USD 2m one-touch option, with a knock-in at 1.31.

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.