The short takeaway from the UK election is that GBP gamma should not be shorted. As you can see from the chart above the actuals have consistently been under the
following the referendum. This is not just the one-off effect of the sharp GBP decline following the referendum result but has remained persistent. Typically, the price action has been slow GBP rallies with corrective declining vol with sharp short-term sell-offs with rising vol. That is the way to manage the deltas in a dynamic hedging fashion. It is very likely to persist as the EU negotiations begin in earnest. The initial Brexit talks are unlikely to go well. The EU 27 know they are dealing with a government that is passed its sell by date. While the prospect of a much softer Brexit is real, the timing is now much longer than expected as the dust has far from settled on Britains political uncertainty. The probability of another UK election before year-end is high.