Brexit 2019: A Once In A Lifetime Trading Opportunity?

On January 15, UK prime minister Theresa May's Brexit deal suffered the heaviest parliamentary defeat in history for a sitting prime minister. This turn of events has drastically increased the volatility and uncertainty of the manner of the UK's exit from the EU, planned for 29 March.

This once in a lifetime situation is now creating unique trading opportunities for savvy traders.

Today, we outline the upcoming key events you need to know about, what could happen this year with Brexit and highlight some short term and long term trading opportunities - developing right now - that just may make it onto your Brexit trading plan.

Understanding Brexit 'Plan B'

While Theresa May may have suffered a humiliating defeat in the Houses of Parliament, a day later she survived a vote of no confidence on her role as prime minister. It is now her job to bring a better solution - dubbed Brexit Plan B - to her party and Parliament before the next crucial Brexit vote which is currently reserved in the House of Commons for the 29 January.

While the details of Plan B are still rather sketchy, the outcome of the vote on it could trigger a series of unprecedented events and explosive trading opportunities as we highlight below:

Brexit 2019: The possible outcomes

  1. The UK leaves the EU on 29 March without a deal.
  2. A second vote in Parliament: After losing the first Brexit vote, Theresa May could modify the deal and try for a second vote.
  3. A second referendum: This would require an extension of Article 50 (the law in the Treaty on European Union that begins a member's state withdrawal from the EU) as it could not begin before 29 March. According to a new Opinium poll for the Observer, voters would back staying in the EU over accepting Theresa May's current Brexit deal.
  4. A general election: Theresa May could decide that the best way to get her deal through is to hold an early general election, like she did in 2017, successfully beating the opposition parties. Opposition leader Jeremy Corbyn prefers this route, but it requires two-thirds of all MPs to support the move.
  5. Another vote of no confidence: Corbyn's Labour party could call another vote of no confidence in the government at any time. If May wins again then she will press on with her plans. However, if the current government or an alternative government cannot win a vote of no confidence then an early general election would be called.
  6. A major renegotiation with the EU: Instead of carrying out minor tweaks to the deal on the table, Theresa May could call for a complete renegotiation with EU leaders. However, the EU leaders would need to be willing to come to the negotiating table yet again. In this event, an extension of Article 50 would be necessary.
  7. Parliament takes control: Some ministers have suggested to use the upcoming Brexit debates to pass an amendment to allow more time to debate a new Brexit bill. The bill, proposed by Conservative MP Nick Boles, would mean that if no Brexit deal is approved by the end of February the prime minister would have to seek an extension of Article 50.
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