FxWirePro: Condor Spreads for GBP/USD risk averse in low IV

As there are no significant data releases that would propel GBP side for this week and near future GBPUSD may likely to experience low volatility. You can make out from the nutshell; GBPUSD is to have the 3^rd lowest IV among the currency pool.

Currency option strategy through Condor construction: GBP/USD

Since the GBPUSD's implied volatility is perceived to be comparatively minimal, so here comes a multiple leg of option strategy for regular traders of this currency cross when there is little 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.

As shown in the figure, 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.