FxWirePro: GBP/USD Condor Spreads for hedgers on lower IV

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 at the money GB/USD implied volatility is at 7.59%), competitive advantage remains with other HY vols like AUDUSD. 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.