Options Most Bearish on Pound Since 2008 Before Scots Referendum
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Options traders are stocking up on protection against declines in the pound, reflecting risk they see of a selloff in the British currency should Scotland choose tomorrow to become Europe’s newest nation state.
Traders are the most bearish on sterling versus the euro since the 2008 financial crisis. The pound fell to a nine-month low last week after a poll showed nationalists in the lead for the first time this year. While polls last night showed the anti-independence Better Together group back in the lead, the gap was closing. One-week volatility in the currency jumped to the most since 2010 yesterday.