The Henley-on-Thames based firm’s chief investment officer Gary Reynolds explained that the firm has been cashing in on its dollar exposure through selling off put options over recent days.
“Actual volatility is less than implied volatility and everyone is trying to reduce exposure to the pound,” he said. “This means that as the polls suggest a rising chance of Brexit, a good premium is available to sellers of dollar puts.”
Reynolds said the Courtiers growth portfolio has reduced its long on the dollar by approximately 30%. The firm still has a net long on the dollar but of smaller magnitude that has been the case recently.
He added that he sees the floor for the UK pound to be $1.36 and this assumption underpins the recent selling down of the dollar long.
The three polls on the referendum released this week so far have indicated a lead for the leave vote of between 5% and 7%.
