GBP/USD range is defined by binary barriers at 1.27-1.26 on the downside and 1.30 on top.
They are part of the short volatility strategy employed since GBP/USD peaked above 1.30 on Oct.
21-22 and were placed in expectations of limited GBP ranges before the UK election.
They're proving profitable so far nL2N27T072.
Associated hedging activity has helped further restrict realised GBP volatility.
However, the market is aware of the risk of election-related headlines as we near Dec.
12, which is helping to lift shorter-dated implied vols off recent lows.
Look out for one-month implied vol to rise further Thursday when expiry lands after Dec.
USD/JPY downside risk appears to be growing as implied vols and the JPY call premium on risk reversals lift off their long-term lows.
Also outright demand for sub-one-month expiry options that would benefit from a lower spot and higher vols nL2N27T0AG.
EUR/USD vols remain heavy, although 1-month captured ECB and Fed Tuesday, to underpin nL2N27S07X.