One-month implied pound volatility, popularly known as the cost to protect against swings in Pound/Dollar exchange rate reached new height today at 23.7 percent. It is now standing at highest point since the crisis of 2008/09 when one month implied volatility reached above 30 percent. The cost of protection in Euro/Pound exchange rate has also surged to 22.5 percent, again highest since the crisis.

The decline in Pound is so certain in the event of an exit, that it is becoming increasingly difficult to insurers ready to assume risk in the primary market. Hence, Sterling insurance is extremely costly in the secondary market.

Asset managers, market participants, and corporations are protecting them mainly from the down-side according to risk-reversal. Risk-reversal, which typically points, which side market is trying to protect itself from is currently at 7.85 percent, which is biggest ever, much higher than 6, seen during 2008/09 crisis.

Recent polls suggest that the race is very tight, especially since some are predicting in and some, out. In most of the cases, the margin of lead is very low. According to Financial Times’ poll of polls, “Stay” camp is leading by just 2 percentage points.

The pound is currently trading at 1.439 against dollar.