Penny ante pissery

The omicron variant of Covid has triggered a wave of bets against the pound amid fears that the Bank of England will move slowly to tackle soaring inflation fuelled by the energy crisis.

Wagers on a slide in sterling reached a net total of £3.6bn in the run-up to Christmas, the highest level since October 2019 when Parliament was wracked by a series of crunch votes on Brexit and £4.5bn was positioned against the currency.

The London FX markets trade some £2 trillion a day. Sure, not even a majority of that concerns sterling at all but still. £3.5 billion is penny ante pissery stuff.

That’s before we get to the truth that absolutely every position is bear – because there are two sides to every position so there must be a bull and bear each time.

12 thoughts on “Penny ante pissery”

  1. Bloke in North Dorset

    Are they saying they expect the ECB to act faster and more decisively? I’ve got a couple of bridges for sale if that’s the case.

  2. “The omicron variant of Covid has triggered a wave of bets against the pound amid fears that the Bank of England will move slowly to tackle soaring inflation fuelled by the energy crisis.”

    Is this some kind of automatic story generator? Omicron: check. Currency speculation: check. Inflation: check. Energy crisis: House! What do I win?

  3. penny ante pissery stuff

    eh?

    there must be a bull and bear each time

    Well no, not really: yes, there are two sides to every position but not every buyer is a bull and not every seller is a bear.

  4. Betting against the pound has not been a great idea since the interest rate rise. It seems to have strengthened against just about every currency

  5. @TMB
    True a buyer covering a short position isn’t going long. But every seller thinks the market is overvaluing & every buyer, undervaluing. There is nothing more to it.

  6. BiS – I think that’s possibly at bit simplistic because the seller may be profit taking, or rebalancing his holdings or following up a more tempting opportunity.

  7. It is that simple, TMB. Every striking price is ephemeral. An instant in time. And caries no information whatsoever apart from a seller wished to sell & a buyer wished to buy at that price. All bids & offers otherwise are, by definition, incorrect because they have not resulted in a trade.

    “the seller may be profit taking, or rebalancing his holdings or following up a more tempting opportunity.” You can assign any reasons you like. All we can be sure of is the seller preferred the money to the asset.

  8. “the seller preferred the money to the asset” ≠ “every seller thinks the market is overvaluing”

  9. Ummm.. Wat Dabney… You do realise that the stories “representing our side” are subjected to the same scrutiny we give to Guardian columns… ?
    And that that absolute beaut you linked is well beyond even Guardian-level nuttery?

    Now play nice and keep that ParanoidarPorn to yourself please, you’re doing us a disservice here.

    Dunno who Charly is, but… yeah… the same.

    Hell… you peeps make Ecksy look sane……

Leave a Reply

Your email address will not be published. Required fields are marked *