The highly-anticipated and highly-feared U.K. “Brexit” vote on June 23 is now just days away. Rather than falling victim to irrational fear about the outcome, now is the time to set up some pre-vote pair trades involving British stocks Barclays (BCS), Vodafone Group (VOD) and BP (BP).
What Would the Brexit Fallout Look Like?
Fear is quite possibly the strongest motivator when it comes to the emotions of trading. Global equity markets will likely get pounded if the U.K. votes to leave the E.U. this week.
How bad could it get? Risk-modeling companyAxioma projects that British equities would fall 24% within three months in the event of a “leave” vote.
The Economist Intelligence Unit projects that the pound would fall 14-15% against the dollar within a year of a “yes” vote, the U.K. economy would shrink 1% in 2017, London would lose its status as a global financial center and the U.K. economy would end up 6% smaller by 2020 than it would have been.
Those projections are certainly scary.
What Are The Brexit Polls Saying?
British stocks have sold off hard this year, so the market fear of a Brexit is certainly real.
Depending on which poll you choose to trust, it appears as if the vote could go either way. A recentNatCen poll found 51% of voters in favor of “stay.”
An Ipsos MORI poll on Thursday found 53% of Brits in favor of “leave.”
The latest Survation/IG telephone poll also gives the “leave” vote the edge, with 45% in favor of a Brexit, 42% in favor of staying in the E.U. and the remainder undecided.
What Are The Actual Odds Of A Brexit?
The bookies in Britain are all still betting…
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