Do not invest more money than you can afford to lose.
CySEC-regulated forex broker easyMarkets said on Friday it is launching options trading on the movement of the British pound (GBP) amidst the deep market volatile resulting from the upcoming UK referendum, which will take place later this month. The broker offers three types of options based on the assumption that the GBP will fall below $1.15 affected by the UK voting.
Traders can invest from $15 to $1,500, depending on their preferences. They can wait until 27 June when the options expire and get their profit then, or close the order prematurely.
Trading in the options has already begun. Here are the three types of options that the broker is offering:
- $15 option with the GBP/USD reaching 1.10 giving a payout of $500
- $150 option with the GBP/USD reaching 1.10 giving a payout of $5,000
- $1500 option with the GBP/USD reaching 1.10 giving a payout of $150,000
The UK will hold a referendum on 23 June, to decide whether the country should exit the EU (aka Brexit) or remain in the union (aka Bremain). Both scenarios are highly likely, considering the on-going voter turnaround, and experts are not certain of the possible outcome of the referendum. Speculations and referendum pollings have already had a sensible impact on the markets, making them more volatile. Following is a graph of the GBP movement compared to USD for the last six months (9 December, 2015-10 June, 2016):
Whatever the outcome of the UK referendum, it would surely have a strong impact on the sterling pound, although at this point it is not certain whether in the long-term that would be a positive or damaging effect. The UK referendum is among if not the most important political event this year. Many experts refer to it as having historic significance.
With the nearing of the referendum, many forex brokers have decided to increase margin requirements on GBP pairs and some other UK-related tradable instruments in an attempt to minimize client exposure.
The volatile market environment presents great opportunities for some investors, but such conditions are very likely to result in great losses for most traders.
easyMarkets, which was until recently known as easy-forex, is a brand of Easy Forex Trading, which is regulated by the Cyprus Securities and Exchange Commission (CySEC). It offers trading in more than 300 instruments, including forex, CFDs, options, metals, commodities and indices. The broker also offers the so-called Vanilla Options trading, which is a type of options trading in which the maximum risk an investor faces equals their initial investment.
Source: easyMarkets
