Skip to content launches new corporate indices for trading Brexit volatility

Broker has launched two new indices on its trading platform to help traders to navigate the market volatility being created by Brexit. Called the Brexit High 50 and Brexit Low 50 they chart the impact – or lack of it – on UK businesses.

The Brexit High 50 charts the impact of Brexit on domestically-focused businesses, while the Brexit Low 50 measures Brexit factors and how they affect businesses that do not rely on the UK for a significant portion of their income. They can be traded through the platform like any other markets and can be shorted in the same way as other indexes like the FTSE 100.

Companies within the Brexit High 50 include Admiral, BT, EasyJet and Sainsbury, all considered vulnerable to Brexit-related factors. The High 50 is currently down 14% year to date.

Companies within the Brexit Low 50 include Anglo American, Diageo, Intercontinental Hotels and Rolls Royce. This index is actually down 10% for the year to date.

Trading Brexit volatility with indices

Many traders will be wondering which companies are most likely be affected by Brexit and therefore most likely to trade in a volatile manner. The FTSE 100 index includes many companies that have the vast bulk of their revenues derived from outside the UK – these are large multinationals, who while they might have a head office in the UK, will not be as badly affected as companies with the bulk of their revenues stemming from the UK or, like EasyJet, have grown up with access to EU markets as a core part of their business proposition.

By dividing these blue chip stocks into those that are more exposed to Brexit, and those with a more global orientation, has made it easier for traders to use this factor as a benchmark or indeed to trade the Brexit theme in the coming weeks without having to make a judgement on individual companies.

Further reading for Armchair Traders:

Stuart Fieldhouse, Editor

Stuart Fieldhouse has spent 25 years in journalism and marketing, including as a wealth management editor for the Financial Times group, covering capital markets and international private banking, and as an investment banking correspondent for Euromoney in Hong Kong. He was the founder editor of The Hedge Fund Journal.

Stuart has worked at CMC Markets, supporting the re-launch of its global financial spread betting and CFD trading platforms. He is also the author of two books on trading, published by Financial Times Pearson. Based in The Armchair Trader’s London office, Stuart continues to advise fund managers, private banks, family offices and other financial institutions.

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