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The Bullish Implications of a Doubling in Bearish Brexit Hedging

  • Bank of America’s Skew Index surges as U.K. prepares to vote
  • Cautious stance means limited downside should ‘leave’ prevail
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If Britain Votes Leave, What Happens Next?

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The price of protection is skyrocketing across financial markets ahead of tomorrow’s U.K. referendum, a signal to one researcher that the market fallout will be muted.

Bank of America Corp.’s Skew Index, which measures demand for hedging against large swings in global equities and currencies, has more than doubled this month to 1.50, and the gauge reached 1.63 last week, the highest level since October 2011, during the height of Europe’s sovereign debt crisis.