Option market betting on European Central Bank cutting interest rates unexpectedly in 2026. Potential return as high as 12 times.

Traders are betting that European Central Bank policymakers will unexpectedly implement a 25-basis-point rate cut at some point this year through options, which could bring up to a 12-fold return on investment. Several large-scale bets have been made this week through options strategies linked to the three-month Euribor rate. If the ECB does cut rates, these positions could potentially earn a total of 32 million, or 12 times the initial investment. This contrarian move is notable because the market had widely expected the ECB to keep rates unchanged this year. While the central bank is expected to stand pat at its meeting next week, policymakers are now forced to consider the factor of the skyrocketing euro exchange rate, sparking discussions in the market about the possibility of further easing.