Is the UK heading for a hard or soft Brexit? Trade the opportunity

FREE Trading Package

E-book guide, video strategies, top trade ideas and free demo to help you trade the volatility.

Our free trading package includes:

 

  • In-depth E-Book: 'How to Trade Hard/Soft Brexit'
  • Free access to Special Webinar: 11th October, 8pm with expert live market analysis & trade ideas
  • Our Top 5 Trade Ideas to help you take advantage of the volatility
  • Video Trading Strategies for both a 'Hard Brexit' and 'Soft Brexit' scenario
  • Regular updates as the markets react to Brexit developments

Sign up to the most comprehensive Brexit Trading Guide on the market - which includes a free demo of our award-winning trading platform.

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How to Trade Brexit Scenarios

Hard Brexit means leaving the EU without a trade deal in place, forcing the UK to fall back to trade on WTO terms with its international partners. UK exports to the EU would be subject to customs checks and additional taxes. Opponents of Brexit argue that a Hard Brexit would be catastrophic for business.

In this scenario, the expectation is that there could be a sharp drop in the GBP, a jump in inflation and a large hit to UK GDP. Market volatility may increase dramatically as investors react to the UK losing a free trade deal with its biggest trading partner, but which markets could move the most and how can you trade them? Find out in our FREE Guide.

How to Trade a Hard Brexit

Soft Brexit means the UK agreeing a trade deal with the EU, with a minimum two-year transition deal in place to enable a comfortable adjustment period before the new deal kicks in. This new deal would likely mean the UK maintains close ties with the EU, including potentially joining the EEA or negotiating a new customs partnership alongside enabling continued trade in financial services, the heartbeat of the UK economy.

This type of Brexit would be seem much more favourably by the markets, with investors preferring a sense of stability and the removal of uncertainty. In this sense, the UK related markets may enjoy a relief rally. But which markets could rally the most? Find out in our Brexit Trading Guide.

How to Trade a Soft Brexit
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Why September could be a HUGE month for GBP and FTSE volatility
Brexit timeline: key dates for traders

As October's EU summit approaches in which the UK is expected to finalise the terms of its divorce from the European bloc, we've created a comprehensive guide to navigate you through the possible scenarios, as well as the potential ramifications on global markets.

 

The prospect of Brexit has already sent shockwaves through the markets since the historic vote to Leave on June 23rd 2016 - but with Brexit yet to actually come, what can traders expect?

  • September 30 - October 3: The last Conservative party conference before Britain is scheduled to leave the EU
  • October 18-19: EU Summit. Will the final agreement on divorce term be finalised? How will the statement on future relations affect GBP & FTSE?
  • November: An emergency summit could be needed to finalise the deal if deadlock in Ireland continues
  • December 13-14: last European Council of 2018 is seen as the final practical date for Article 50 to be signed off by both parties
  • January - February 2019: The House of Commons must approve whatever Brexit deal PM May agrees in Brussels
  • March 29 2019: Brexit day arrives. Will it be a seamless transition or a chaotic scramble for politics and markets alike?
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The impact of Brexit so far

As we examine the markets that are likely to be the most impacted by the outcome of the final Brexit negotiations, we need to first analyse the reaction on June 2016 when it became apparent Britain had voted to leave the EU.

The result took the government - as well as the markets - by huge surprise, as most major polls were predicting a narrow victory for Remain. 

GBPUSD LP 13th Sep

In fact, the pound was rallying into the referendum as the markets were betting on a victory for remain, with the 7 days before the vote seeing GBPUSD gain by 7% overall. What this meant was a lot of traders were caught wrong-footed by the shock outcome and therefore the declines were more panicked and saw a larger reaction. Source: xStation

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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading CFDs with XTB Limited. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading CFDs with XTB Limited. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading CFDs with XTB Limited. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.