Still Talking About BOE Hikes? Some Are Already Betting on a Cut
- Short sterling option trades aim at 2019 cut being priced in
- Strategy to gain from potential BOE response to a hard Brexit
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Barely a week after the Bank of England raised interest rates, some investors are betting on a cut.
They are building positions in money-market options that pay off if broad market expectations swing toward a rate reduction as early as March -- which happens to be the deadline for Brexit. Simply put, they are looking to profit on a potential policy response from BOE should the U.K. leave the European Union without a deal.