Options activity: Investors seek downside protection in AUD

Omkar Godbole FXStreet Contributor

The AUD/USD pair is trading in the sideways manner around 0.79 handle after having hit a high of 0.7988 on July 20. The overbought conditions and the indecision in the market as indicated by July 20 Doji candle has forced investors to seek downside protection against long spot positions.

ADUQ7 Open Interest Change: Current (Jul 25 - Prelim) vs. Jul 24

Call Summary
Total		ITM		OTM
OI	Chg	OI	Chg	OI	Chg
10,082	-62	8,423	-92	1,659	30

Put Summary
Total		ITM		OTM
OI	Chg	OI	Chg	OI	Chg
14,259	1,115	372	66	13,887	1,049

The big jump in the OI in the put options, coupled with the net reductions in the OI in the call options clearly highlights the fact that the idea of a pullback is gathering traction. The OI in the 0.7850 put option jumped by 823 contracts. 0.79 Put added 112 contracts.

The spot could test 0.7829 (38.2% Fib R of July 7 low - July 20 high) - 0.78 levels in the short-term. The overbought technical conditions and the jump in the Put options OI gels well with the RBA’s jawboning effort.

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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