Brexit & Binary Options Trading
Everybody knows that when something changes this leads to shifts in other related spheres, too. This is especially accurate observation when it comes to Global market and the processes that take place there. Even if the most insignificant detail turns from its usual direction, great consequences are going to follow. Not to mention what happens if something more significant happens, the outcome is always unpredictable. And everyone remembers the great financial crisis back in 2007. There are many countries that are still unable to recover from it.
In 2016 another major event happened and the center this time took place in the Old Continent and more specifically in Great Britain. What caused the big noise was called BRexit. This political situation caused unspeakable chaos all over the world due to the fact that Great Britain is one of the main forces when it comes to trading and economy power and impact.
In this line of thinking, it is perfectly normal that the online trading field, and more specifically – binary options investing sphere was affected, too. The main reason for this is of course the fact that this type of online investment is popular globally, and every local or global financial or political change reflects on it as a mirror. However, it is important for people to understand what actually BRexit is and what kind of changes it caused to the binary options trading field.
What Does BRexit Stands For?
The whole thing began in June 2016 when it became clear that United Kingdom is going to withdraw from the European Union – the process that followed is widely called BRexit. It should be noted that it is a result of the referendum in which 52% of the population voted for leaving the Union. It is no t difficult to figure out that such a political change, where many countries are involved, is going to cause both economic and political shifts in UK.
As of August 2016, neither the timetable nor the terms for withdrawal have been established. Meanwhile, UK is still considered as a member of the EU. The term “BRexit” itself is a word game that combines Britain and exit, standing for a new word, that is related to the situation it describes.
As for now, all the details of the process are uncertain under. Unless any extensions are agreed, the needed time for this withdrawal process to be completed is going to be two years. It starts from the moment Great Britain gives official notice. However, such notice hasn’t still been given. The assumption is that during the two-year time period new agreements will be negotiated, so nothing is 100% sure yet, but nobody knows what could and will happen.
BRexit – Consequences
The most important thing to be mentioned here is the fact that GBP could slump into a “currency crisis” if the crisis continues and the urgent questions remain without answer. In addition, the problems, regarding the stability of the GBP’s price, started to emerge as disturbing signs for what was about to come, about an year ago. The truth is that an effect in the financial market occurred months before the official Referendum and its outcome to happen. The British pound was no longer stable as it used to be, before the mention of the Referendum.
In a short note, foreign exchange firm Caxton FX, notes that the effects of BRexit would set off a major downward spiral in the GBP and its price movement, owing to uncertainty in the markets, and worries about the future of Britain’s economy.
Another serious reason, that lead to this current situation is the fact that foreign investors (mainly big banks) started to leave the UK investment market with disturbing temps.
What is the Connection Between BRexit and Binary Options Trading?
It should be noted and underlined that the rapidly changing price of the GBP, as a result of the BRexit situation is directly reflecting in the binary options online trading field. Due to the fact that this type of online investing is related to placing bets on different assets pairs’ movement and the prediction of which direction (Up or Down) is going to happen for a set period of time, the constantly changing value of the pound is of great importance. Taking into consideration the fact that it is easy for prediction, if a trader bets on its falling price he is very likely to win the trade.
This means that all the trades that include GBP are easier for prediction and thus investors can accumulate significant profits by dealing with binary options and more especially by involving the pound in the bets they place.
To sum it up, trading binary options with keeping BRexit in mind could be really profitable business for those who know how to take advantage of the constantly changing market conditions. However, everyone should be careful because this financial field is not so easily predictable, no matter how it may look.