USD/INR risk reversals rise on call demand
|USD/INR one-month risk reversals, a gauge of calls to puts, rose to 0.95 on Tuesday, having bottomed out at 0.35 on June 9, according to data provided by Reuters.
The rise in risk reversals represents an increase in demand for USD/INR calls or bullish bets. In layman's terms, it indicates the investors are adding bets to position for weakness in the Indian rupee.
The increased demand for call options validates the multi-week-long contracting triangle breakout on the daily chart confirmed by Tuesday's 0.72% rise. The technical breakout has opened the doors to a re-test of the April 21 high of 76.82.
Risk reversals
Daily chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.