Investors have bet more than £11 billion on Brexit crushing the pound
Getty
According to data compiled by Bloomberg, investors have piled up more than £11 billion ($15.5 billion) in currency options that would profit is the pound falls more than 4% from where it is right now, after the UK's EU membership referendum on June 23rd.
Currency traders are expecting the pound to fall below $1.35, a level not seen since the 1980s, in the event of a Brexit.
Sterling traders have become increasingly jittery about the prospect of Brexit and its impact on the UK economy since the referendum date was officially confirmed, and news suggesting that Britain leaving has invariably sends the pound lower.
Yesterday the pound slipped substantially after an opinion poll from ICM suggested that leaving the EU is now a more popular option than remaining. When Mayor of London and Conservative MP Boris Johnson announced his intentions to back the "Leave" campaign in late February, the pound crashed, losing more than 2% in a single day, and hitting a seven-year low.
Those jitters have sent the volatility of the pound, as tracked by CBOE, surging to levels not seen in over a year. Here's how that looks:
Investing.com
Warnings about the impact of Brexit on the pound have been widespread.
In early March, FX trading firm Caxton, warned that Brexit could cause a "currency crisis" in the UK, while last week, the Bank of England essentially said that the prospect of Brexit is the main reason for the pound's fall - which has seen it drop more than 17% since October.
- US buys 81 Soviet-era combat aircraft from Russia's ally costing on average less than $20,000 each, report says
- 2 states where home prices are falling because there are too many houses and not enough buyers
- A couple accidentally shipped their cat in an Amazon return package. It arrived safely 6 days later, hundreds of miles away.
- Markets rebound in early trade amid global rally, buying in ICICI Bank and Reliance
- Women in Leadership
- Rupee declines 5 paise to 83.43 against US dollar in early trade
- Election Commission issues notification for sixth phase of Lok Sabha polls
- 6 Coffee recipes you should try this summer
- JNK India IPO allotment date
- JioCinema New Plans
- Realme Narzo 70 Launched
- Apple Let Loose event
- Elon Musk Apology
- RIL cash flows
- Charlie Munger
- Feedbank IPO allotment
- Tata IPO allotment
- Most generous retirement plans
- Broadcom lays off
- Cibil Score vs Cibil Report
- Birla and Bajaj in top Richest
- Nestle Sept 2023 report
- India Equity Market