Traders Buy Pound Protection on Policy, Election and War Risks

Investors are adopting a more cautious approach to the pound, with options traders zeroing in on three distinct risks.

Central bank meetings this week, local UK elections on May 7 and fallout from the Middle East war are showing up in different parts of the options market. But the trend is consistent: bearish-sterling positions make up nearly 60% of options against the dollar this month and more than 70% against the euro.