British PM May’s latest Brexit deal was rejected by the House of Commons, and that knocked the pound down more last night after dropping sharply yesterday, which came after a nice rally on Monday. Poor Britain. I’m not sure if anyone over there really understands what’s happening anymore. They should just have a nice supper of roast beef washed down with some gin, and plunge ahead with Brexit at the end of March. They won’t, of course, and that’s helping to push the IV rank of FXB, the British pound ETF, up to 64%. FXB doesn’t have the best liquidity, but its high IV could make it worth some effort to get filled in its options. If you think the British pound and FXB might trade in a wide range for the next month as Brexit gets sorted out, the short iron condor that’s long the 122 put, short the 124 put, short the 131 call and long the 133 call in the April expiration with 36 DTE is a neutral strategy that collects a credit 1/3 the width of the strikes, has a 70% prob of making 50% of its max profit before expiry, and that generates $.90 of positive daily theta.
Opened 19/03/14 for $.65 credit
Closed 19/04/01 for $.65 debit