Two thirds of Banc De Binary traders were short on Sterling when announcement made
Private investors followed hedge funds in on “Carney short”
Private investors have been big winners from Moody’s cut of the UK’s AAA credit rating, says Banc De Binary, the leading binary options trading firm.
Banc De Binary says that 66% of its customers who opened positions on sterling were betting against the currency as Moody’s made its announcement.
Banc De Binary says that its private investors have been steadily increasing their bets against sterling since the start of this year. Oren Laurent, CEO of Banc De Binary, says: “The downgrading has produced a windfall for private investors with the sudden slump in Sterling this morning (Monday) allowing a lot of customers to close their trades for a very handsome profit.”
“The weak performance of the UK economy meant Sterling has been seen as easy prey for some time but it is the views ascribed to the incoming Bank of England Governor Mark Carney that encouraged private investors to move in for the kill.”
“Carney’s seemingly relaxed attitude to inflation combined with a growing desire at the Bank of England to restart QE combined to make going short of sterling seem like a gift.”
Carney recently suggested to the House of Commons Treasury Committee that the Bank of England’s target of 2% inflation could be more flexible during his five-year term as Governor, which begins in July.
Oren Laurent says that private investors shorting sterling is a good example of smaller investors following hedge funds in on a trade.
Laurent adds: “A lot of hedge funds piled on the bets against Sterling in recent weeks, having made big gains on shorting the Japanese Yen since the end of 2012. Private investors chose to go along for the ride and are finding that there is money to be made by shorting Sterling. “Investors feel that with the pressure mounting on George Osborne and the ‘Carney short’ still in place Sterling’s volatility hasn’t ended yet.”
