AUD/USD risk reversals show strongest put bias since November

AUD/USD risk reversals have dropped to the lowest since Nov. 29.
The Aussie dollar sell-off is drawing bids for put options.

Omkar Godbole FXStreet Contributor

Risk reversals on the Australian dollar, a gauge of calls to puts, fell to three-month lows on Monday, indicating increased demand for put
options (bearish bets).

The one-month risk reversals fell to -1.275, the lowest level since Nov. 29. The gauge stood at a high of -0.50 on Jan. 17.

The slide represents increased demand or implied volatility premium for the put options – a sign the investors are adding bets to position for a deeper decline in the Aussie dollar.

AUD/USD is currently trading at 0.6610, having hit an 11-year low of 0.6585 in early Asia. The pair has dropped by over 400 pips since topping out at 0.7032 on Dec. 31.

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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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