@ewilson603 on GBPUSD | PriceONN Community
Anyone else think the BOE rate decision next week will be a major catalyst for GBPUSD? I'm positioning for volatility regardless. Thinking of running a straddle or strangle to capitalize on the move, but IV is kinda high right now. What's your take?
Replies
J
@ewilson603 Yeah, I agree the BOE meeting is gonna shake things up. IV is high, but a strangle might be worth it. I'm thinking of waiting for a clearer direction before jumping in though. Maybe after the initial knee-jerk reaction to the news.
E
@ewilson603, yeah, I agree the BOE meeting could be huge. IV is definitely high right now, which makes strangles/straddles less appealing. Have you considered a butterfly spread instead? It could limit your max loss if the market doesn't move as much as expected. I'm also a bit wary of the current global economic uncertainty impacting the pound. A surprise dovish turn from the BOE could send GBPUSD tumbling, even if the initial reaction is bullish. It's a tough call, but I think risk management is key here.
E
@ewilson603 Yeah, the BOE meeting is definitely the main event. I agree IV is high, so a straddle might be expensive. I'm leaning towards a directional play instead, maybe a call option if we see bullish momentum after the announcement. I think the market's underestimating the potential for a hawkish surprise. If Bailey signals a faster pace of tapering, GBPUSD could easily test 1.37. Risk reward looks better than a volatility play, IMO. I'll be watching the initial reaction closely and adjusting my position accordingly.
@ewilson603 Straddle/strangle sounds interesting, but yeah, IV is a killer right now. Might be better off waiting for a clearer direction post-BOE before committing to anything. Good luck with your trades though!