The Brexit vote is just around the corner, and that's easy to tell just by looking at the Dow Jones Industrial average. Today, the the index is headed lower as investors start to weigh the affects that could result from a Brexit vote. Today, we'll talk about what a Brexit is, what is has to do with the Dow, whether or not it's likely, and what binary options traders can do to take advantage of the trends. So, let's get right to it…
What Is A Brexit
The word Brexit is used to describe the action of the UK leaving the European Union. Essentially, it's a play on words that means British Exit. This is a topic that has been long debated. Here's the argument from both sides…
Brexit Supporters – Brexit supporters argue that the relationship between the UK and the EU is a very unhealthy one. Essentially, because of this relationship, the UK economy is heavily dependent on the European economy. However, lately, the European economy has been struggling in a big way. So, those that support a Brexit say that by leaving the EU, the UK will relieve its economic dependence on an economy that's struggling!
Brexit Opposition – While there are plenty of people that support a Brexit, there are also plenty of people that oppose the idea. On the opposition side of the fence, experts argue that leaving the EU now would create further economic hardships in the UK. In doing so, the region would give up global trade agreements and push its own economy into a downward spiral.
At this point, politicians couldn't agree on whether or not a Brexit would be a good idea. So, they are leaving it up to a consumer vote. Tomorrow, the British people will vote with regard to whether or not they would like to leave the European Union.
What Does This Have To Do With The Dow
From the outside looking in, it may seem as though a Brexit and the Dow are two completely unrelated topics. However, that's not exactly the case. You see, the world runs on global trade. So, when a large economy or multiple large economies struggle, the world struggles.
If a Brexit were to happen, it would likely cause incredible economic pain in both the UK and Europe. Becausse these are two of the world's largest economies, this would likely cause economic devastation around the world. As a result, we could expect to see declines in global indices. Unfortunately, the Dow Jones Industrial Average simply wouldn't be immune to the affects.
Is A Brexit Likely
Although there's no one that can tell the future, there have been several polls around the topic, and I've been watching them closely. Overall, it seems as though the UK people are leaning toward leaving the EU. In fact, I've only seen one poll, offered by Survation, that showed that those in favor of staying with the EU were in the lead.
In fact, the most recent poll was offered by Opinium. This poll showed that 45% of consumers in the UK are likely to vote to leave while 44% of the British people are likely to vote to stay. With plenty of undecided votes out there, it could go either way. However, at the moment, it seems as though a Brexit is imminent.
How Binary Options Traders Can Take Advantage Of The Trends
Regardless of how this goes, we're likely to see strong trends in the Dow Jones Industrial Average that will lead to opportunities for binary options traders. Here's what you should be watching for…
Stay Vote – If the British people vote to stay with the EU, we're likely to see big gains in the Dow. In this case, binary options traders should be watching for strong call option opportunities in order to ride the trends up to the profits.
Leave Vote – If the British people vote to leave the EU, we're likely to see big declines in the Dow Jones Industrial Average. In this case, binary options traders should be watching for strong put option opportunities in order to take advantage of the trends.
What Do You Think?
How do you think the vote will go? Let us know your opinion in the comments below!
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