Courtiers cashing in on the dollar as Brexit chances rise

Added 14th June 2016

Courtiers has been selling down some of its long position on the US dollar to bank profit generated by the rising probability of Brexit.

Courtiers cashing in on the dollar as Brexit chances rise

The Henley-on-Thames based firm’s chief investment officer Gary Reynolds explained that the firm has been cashing in on its dollar exposure through selling off put options over recent days.

“Actual volatility is less than implied volatility and everyone is trying to reduce exposure to the pound," he said. “This means that as the polls suggest a rising chance of Brexit, a good premium is available to sellers of dollar puts.”

Reynolds said the Courtiers growth portfolio has reduced its long on the dollar by approximately 30%. The firm still has a net long on the dollar but of smaller magnitude that has been the case recently.

He added that he sees the floor for the UK pound to be $1.36 and this assumption underpins the recent selling down of the dollar long.  

The three polls on the referendum released this week so far have indicated a lead for the leave vote of between 5% and 7%. 

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Alex Sebastian

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Alex joined Portfolio Adviser in April 2014 and has been a financial journalist since 2008. He has previously held editorial positions at the Financial Times Group and Euromoney Institutional Investor. Alex is NCTJ qualified and has a degree in economics from the University of Sussex.



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