GBP/USD: demand for puts (bearish bets) hits 7-month low ahead of Brexit vote

Omkar Godbole FXStreet Contributor

The GBP/USD one-month 25 delta risk reversals (GBP1MRR) are currently trading at -0.425; the highest level since June 11.

The negative number indicates a bias for put options (bearish bets). Risk reversals, however, have risen sharply in the last two months - the gauge stood at -2.77 on Nov. 16.

The near 90-degree rise represents a sharp drop in demand or the implied volatility premium for the GBP put options (bearish bets).

The drop in demand for bearish bets is likely an indication that the scenario of Brexit vote defeat by a big margin is already priced in.

GBP1MRR

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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