With just one day to go until the UK Brexit referendum actually happens, the chances of the Remain side winning seem to be rising.
At least according to those putting real money down on the final result.
We have been following the Brexit Barometer created by leading online trading firm IG Group Holdings plc (LON:IGG) over the past few weeks. As it does with other major political events, IG has created a ‘political binary market’ allowing traders to bet real money on what the actual outcome of the Brexit referendum will be.
IG’s Brexit binary market is fairly simple and straightforward.
As of early Wednesday morning the cost of entering a bet to win £100 if the Remain camp wins was £77.50. (Actually, a sell-buy spread of 76-79, so that it would cost 79 to place the bet, and a trader would receive 76 to exit an existing Remain bet today. £77.50 is the midpoint of the sell-buy spread.).
Similarly, placing a bet to win £100 should the Leave side prevail costs only £22.50 (or again a sell-buy spread of 21-24).
What that means, of course, is that traders in IG’s binary market believe that there’s a 77.5% chance of Remain winning tomorrow’s vote. (Data are as of 9:15am UK time Wednesday).
The 77.5% Remain figure is the highest it has been since the end of May, when the Leave side started gaining momentum which ended with the June 16 murder of pro-Remain MP Jo Cox.
The 77.5% figure is also up from 75.5% yesterday afternoon, as indicated by the graphic at top.
The latest IG-Survation poll of what the actual results will be is 51% Remain vs. 49% Leave, based on a telephone poll of more than 1,000 voters conducted on Monday June 20.
Since traders are putting real money to work here, not surprisingly IG clients have a strong track record in correctly predicting political events. In 2012 they correctly predicted Barack Obama’s Presidential election victory and Boris Johnson’s London Mayoral election victory. They also correctly predicted a victory for the “No” vote in the Scottish independence referendum in early 2014.
We will continue to bring LeapRate readers all the key Brexit developments as they occur.