Risk reversals imply negative sentiment on sterling
LONDON – Implied volatilities for sterling have crept higher and options traders say the market is taking a negative view on the pound, as concerns about the fiscal condition of the UK and the possibility of a hung parliament after a general election later this year have spooked markets.
"Sterling-related volatilities are now the most expensive of the G-10 space, both compared with other implied volatilities and their own historical volatilities," said Lorenzo Ravagli, a quantitative strategist
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