Traders Brace for More Pound Volatility After Flash Crash: Chart

Sterling’s three-month implied volatility versus the dollar, a measure of the cost of protection against future price swings, jumped more than 20 percent Friday, the most since the Brexit referendum result, after a sudden selloff in early Asian trading fueled anxiety over the U.K. currency. Speculation computer-driven orders may have sparked the plunge -- which saw the pound slump more than 6 percent in a matter of minutes -- added to more fundamental concerns that the European Union will make Britain suffer the consequences of its decision to leave the 28-nation bloc.

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