Pound's $16 Billion of Option Trades Envisage Drop to 1980s Lows
- Bets placed on drop roughly equal to size of Iceland's economy
- Three-month volatility options now span the referendum day
Boris Swims Against Tide of ‘Brexit’ Warnings
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As Britain ponders its future in the European Union, investors are betting an amount almost the size of Iceland’s economy on the pound falling to levels last seen in the 1980s.
At least 11 billion pounds ($16 billion) has been wagered this year on options that would profit if sterling fell to or below $1.3502, a 4.5 percent drop from current levels, after the June 23 referendum. More than half of the positions were placed since the date of the vote was set on Feb. 20.