FxWirePro: Cable portfolio reshuffling on low IV projections: add strangle shorting for speculation - continue with condors for hedging

On weekly charts GBP/USD's range bound pattern is persisting but some bearish candles are indicating slight weakness, candles on daily chart such as shooting star and spinning top occurred at 1.5595 and 1.5614 respectively.

But we foresee range bounded trend but little weakness on weekly charts is puzzling this pair on EOD charts we like to remain in safe zone and recommend shorting a straddle using At-The-Money options, thereby, one can benefit from certain returns by shorting both calls and puts.

Naked Strangle Shorting
Overview: Slightly bearish in short term but sideways in medium term.
Time frame:  7 to 10 days

This is brave call that we are taking it today with strict stop loss As you can see from ATM volatility nutshell, cable would likely perceive low volatility in next 3-6 month time frame.  

Hence, contemplating this short OTM put and OTM call simultaneously of the same expiry (preferably short term for maturity is desired but strikes at 3% bucket on either side).

Hedging perspective:

The only reason preferring for this strategy is that IV factor. Since the GBPUSD's implied volatility is perceived to be comparatively minimal among the G7 currency pool (near month at the money GBP/USD implied volatility is at 7.5%). So here comes a multiple leg option strategy for hedgers of this currency cross when there is low IV. A total of 4 legs are involved in the condor options strategy and a net debit is required to establish the position.

The trader can construct a long condor option spread as follows ideally for the short call spreads to expire worthless. The trader can implement this strategy using call options with similar maturities. So strategy goes this way, writing an (-1%) In-The-Money call and buying deep striking (-1.5%) In-The-Money vega calls, writing a higher strike (1%) Out-The-Money calls and buying another deep striking (1.5%) Out-Of-The-Money vega call for a net debit.