All
Outcomes
Market
Price
AI Fair
Value
Value
Edge
4.5%+
YesNo
4.0-4.4%
YesNo
1.0–1.4%
YesNo
<1.0%
YesNo
3.5–3.9%
YesNo
1.5–1.9%
YesNo
2.5–2.9%
YesNo
2.0–2.4%
YesNo
AI Insights:
03.11 10:34 UpdatedFair Value Reasoning:
A significant shift occurred on March 10-11: OBR official David Miles warned that UK inflation could end 2026 at 'around 3%' due to energy price shocks from the escalating Iran/Middle East conflict, significantly above the previous 2% baseline. This new risk reduces the certainty of the '2.0-2.4%' (BoE Feb baseline) bucket and shifts probability mass upwards (to 3.0%+). However, the market irrationally prices '1.0-1.4%' as the favorite (~28c), which completely contradicts all major official forecasts (BoE 2.1%, OBR 2.3%-3.0%) and represents a severe mispricing. Crucially, the option list is missing the '3.0-3.4%' bucket—the very range the OBR is now warning about—implying the true fair value for the *listed* options is even lower.
Sign up to view more information
Hedging
GBP/USD
UK 10Y Yield
This event is directly linked to UK monetary policy expectations. Inflation data for 2026 will dictate the Bank of England's (BoE) interest rate path for that year. Significantly higher-than-expected inflation (e.g., >4.5%) would boost the British Pound (GBP) and UK Gilt yields, while potentially weighing on UK equities (FTSE) due to tightening fears. As core macro data for a major economy, it has clear hedging value.
Movers
Mar 6, 2026 - Mar 10, 2026, the price of '2.5–2.9%' crashed from 36c to 21.5c, as OBR officials warned on Mar 10 that the Middle East conflict could push inflation to 'around 3%' by year-end 2026, shifting expectations out of this moderate band into higher risk territories.
Mar 6, 2026 - Mar 9, 2026, the price of '1.0–1.4%' dropped from 37c to 28c, a partial correction of its extreme overvaluation, though it remains surprisingly high.
Feb 9, 2026 - Feb 11, 2026, the price of '<1.0%' crashed from 30.5c to 7.5c as the market capitulated to the Bank of England's Feb 5 report anchoring forecasts at 2%.
Divergence
Extreme divergence exists. The market's most expensive option is '1.0-1.4%' (~28c), implying ultra-low inflation is the base case. However, all real-world official signals (OBR's latest March warning, BoE's Feb report) point to the 2.0%-3.0% range. Specifically, the OBR just warned inflation could hit 3% due to geopolitical risks, yet the market is heavily betting on a collapse to ~1.2%, which is fundamentally irrational.
