Brexit is the biggest risk for UK economy – BBH

Research Team at BBH, suggests that everything pales compared with the risk of Brexit.

Key Quotes

“We fear too many people are assuming that, like the Scottish referendum, some opinion polls may be exaggerating the tightness of the contest. The options market suggests that the pressure to hedge remains relentless.

At the end of last week, two-month volatility was at new multi-year highs, and the put-call skew was near record levels. On May 23, the referendum falls under the purview of one-month options. This is where one ought to look to monitor this pressure, which may be understood as the price of insurance.”