Managing Brexit risk

[options-george]

Today Goldman Sachs came out and estimated that a Brexit could result in a 20% depreciation of the British Pound. I don't know how they calculated this, but it did make me think in any case.

Has anyone considered how to manage risk against a depreciating GBP, other than shorting it in spot forex or buying GBP put options? The reason I am hesitant on those possibilities is because the carrying costs for 6-18 months might be quite a bit.

I am specifically talking about hedging the downside of GBP-denominated assets, rather than for speculation or trading.

I'd be interesting in views that T2W members might have.

Thanks in advance,
George

 

[metrader]

They were talking about crude oil possibly rising to $150 - $200 a barrel in 2008 weren't they?

I would look for some other estimates before deciding what to do

 

[gerryg]

They were talking about crude oil possibly rising to $150 - $200 a barrel in 2008 weren't they?

I would look for some other estimates before deciding what to do

Some time their prophecies will be fulfilled. Maybe incidentally.
So better to diversify risks. At least keep some money in EUR and bucks

 

[metrader]

Once I did hedging by trading futures using a big sb company - there were no rollover charges. Only cost was the spread - a bit on the heavy side, but still acceptable (for hedging purposes)

 

[options-george]

Thanks for sharing your thoughts everyone

 

[options-george]

Well, so much for not hedging myself.

Although the benefit of hindsight is always a wonderful thing!