EUR/USD risk reversals hit 7-week low as markets favor EUR puts (bearish bets)

Omkar Godbole FXStreet Contributor

One-month 25-delta risk reversals on Euro (EUR1MRR), a gauge of puts to calls on the common currency, fell to -0.45 soon before press time, indicating the investors are buying put options - adding bets to position for weakness in the EUR.

That is the lowest reading since Dec. 18. A negative number indicates the implied volatility premium or demand for put options is higher than that for calls options.

A put option gives the holder a right but not obligation to sell the underlying at a predetermined rate on or before a predetermined date.

EUR1MRR

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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