A leave vote is still a tangible option and could generate an important sell-off across the global asset markets.
This guest article was written by Charles-Henri Sabet, CEO of London Capital Group.
The Brexit has been a leading driver in the financial markets over the last six months and has clearly injected a sizeable amount of Volatility both in the currency, equity and bond markets. Given the risks and the implications surrounding such a historical event, all types of investors, from retail to institutional, find themselves profoundly involved with Britain’s EU membership issue. Hence, Britain’s decision to ‘Remain’ or to ‘Leave’ is no longer considered as a national matter but an important global event.
Put options have never been as popular, while the spread between put and call premiums stretched to all-time highs.
From investors’ perspective, hedging against Brexit risks has been the most crucial theme since the beginning of 2016. Investment portfolios needed a solid hedge against risks of depreciation in the pound and against the danger of a damaging sell-off in UK and European stocks. Volumes in the option markets reached important levels. Put options have never been as popular, while the spread between put and call premiums have stretched to all-time highs. Increased activity in alternative markets have impacted the pound's volatility measures, the FTSE and the Gilt markets. As of today, we can at least say that the market is comfortably hedged against the risk of Britain walking away from a twenty-three year partnership with the European Union.
Potential Brexit
Nevertheless, hedging against Brexit risks did not prevent the market from considering the ‘Remain’ vote as the base case scenario. The significant hedging activity certainly impacted spot markets in the run up to the referendum. In this respect, the pound lost 13.5 percent between June 2015 to March 2016 and the monthly volatility on pound-dollar spot market reached a seven year high. FTSE 100 stocks wrote off more than 20 percent of their value in ten months. This being said, long-term investors and macro managers continued to base their decisions on the EU’s intact unity. As a result, we shall say that the market is well prepared for a potential Brexit event. Yet paradoxically, the pricing across the financial markets did not evolve in line, or according to the close call we could observe via a number of recent opinion polls.
There lies the risk for short-term investors and retail traders. While the ‘Remain’ vote should trigger a relief rally in an environment of reasonable volatility, a ‘Leave’ vote, which is still a tangible option, could generate an important sell-off across the global asset markets. As petrifying as it sounds, the downside potential is perhaps larger and is insufficiently factored in.
This guest article was written by Charles-Henri Sabet, CEO of London Capital Group.
The Brexit has been a leading driver in the financial markets over the last six months and has clearly injected a sizeable amount of Volatility both in the currency, equity and bond markets. Given the risks and the implications surrounding such a historical event, all types of investors, from retail to institutional, find themselves profoundly involved with Britain’s EU membership issue. Hence, Britain’s decision to ‘Remain’ or to ‘Leave’ is no longer considered as a national matter but an important global event.
Put options have never been as popular, while the spread between put and call premiums stretched to all-time highs.
From investors’ perspective, hedging against Brexit risks has been the most crucial theme since the beginning of 2016. Investment portfolios needed a solid hedge against risks of depreciation in the pound and against the danger of a damaging sell-off in UK and European stocks. Volumes in the option markets reached important levels. Put options have never been as popular, while the spread between put and call premiums have stretched to all-time highs. Increased activity in alternative markets have impacted the pound's volatility measures, the FTSE and the Gilt markets. As of today, we can at least say that the market is comfortably hedged against the risk of Britain walking away from a twenty-three year partnership with the European Union.
Potential Brexit
Nevertheless, hedging against Brexit risks did not prevent the market from considering the ‘Remain’ vote as the base case scenario. The significant hedging activity certainly impacted spot markets in the run up to the referendum. In this respect, the pound lost 13.5 percent between June 2015 to March 2016 and the monthly volatility on pound-dollar spot market reached a seven year high. FTSE 100 stocks wrote off more than 20 percent of their value in ten months. This being said, long-term investors and macro managers continued to base their decisions on the EU’s intact unity. As a result, we shall say that the market is well prepared for a potential Brexit event. Yet paradoxically, the pricing across the financial markets did not evolve in line, or according to the close call we could observe via a number of recent opinion polls.
There lies the risk for short-term investors and retail traders. While the ‘Remain’ vote should trigger a relief rally in an environment of reasonable volatility, a ‘Leave’ vote, which is still a tangible option, could generate an important sell-off across the global asset markets. As petrifying as it sounds, the downside potential is perhaps larger and is insufficiently factored in.
Retail Broker Acetop UK Quadruples 2023 Revenue, Significantly Narrows Losses
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
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Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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