Institutions: The impact of the UK budget has triggered demand for GBP Options.

Jin10 reported on September 2 that forex options traders have noted an increase in demand for pound-related options expiring in the months following the UK autumn budget announcement, which is expected to be released at the end of October or early November. Betting on the subsequent impact seems wiser compared to focusing solely on the budget itself. UK Chancellor of the Exchequer Reeves is expected to introduce a fiscally cautious plan, with tax increases and spending cuts being the main themes. These measures are unlikely to produce surprises on the day, but their cumulative effect may weigh down the pound in the coming weeks. Based on this, the potential volatility risk premium on the budget announcement day may be limited, while long-term volatility trading in the following weeks could capture more fluctuations. Due to concerns about rising borrowing costs, the pound continues to face pressure, and the forex options market reflects this bearish sentiment. Traders have reported that the premium for pound put options relative to call options has risen, highlighting an increased demand for downside protection, indicating that the market increasingly expects the pound to weaken further in the coming weeks.