(May 27 Friday-Bloomberg) It's one of the biggest dilemmas facing currency managers: how to protect against the fallout from the U.K. leaving the European Union without losing money should it vote to remain.
With the pound's volatility against the dollar at the highest in six years and options on its most traded currency pair the most expensive on record, traders are looking for other solutions in the run-up to the June 23 vote. For some investors, including Unigestion SA and Aberdeen Asset Management Plc, that means buying options on the Swiss franc and Swedish krona or using the euro as a proxy for sterling.
"Brexit risks are underestimated." said Luca Simoncelli, a London based money manager at Unigestion, which oversees $19.5 billion. "The event would be similarly damaging for both the euro and the pound and this is why we bought put options on the euro against the swiss franc.
Click on the link below to see the full story from Bloomberg: (by Chiara Albanese & Stefania Spezzati)