It's all about the volatility: How one trader saw Brexit coming
One CNBC "Halftime Report" trader correctly predicted that Britons would ultimately vote to leave the European Union by watching indicators others were not giving as much weight to.
Even as U.S. markets rallied into the Thursday close, with the Dow seeing its best daily performance in four months, Jon Najarian was watching the CBOE volatility index (VIX), which had been hitting new highs ahead of the vote.
Investors and analysts had interpreted the rally as an additional sign of confidence that the U.K. would decide to stay. But many polls had indicated it would be a close call. Najarian said he wasn't sure that "the remain campaign has made a very strong case," especially given the 9 to 10 percent that were undecided at the time.
More importantly, Najarian said that there was "absolutely no reason to remain" for the U.K., since there are no formal trade deals between the EU with China or the United States.
"They can still do business on the continent. ... There's obviously nothing blocking Britain and the EU unless they decide to create one. If they decide to create one, we're talking about a two-year exit anyway," he said.