One-month risk reversal on Palladium (XPD/USD), a measure of the spread between call and put prices, not only reversed the previous week’s upside momentum but also dropped the most since the week ending on July 16, according to data source Reuters.
A call option gives the holder the right but not obligation to buy the underlying asset at a predetermined price on or before a specific date. A put option represents a right to sell. That said, the weekly difference between them slumped to -0.083 by the week ending on August 27.
The moves couldn’t be linked to the XPD/USD price performance as the precious metal seesaws around $2,400 heading into Monday’s European session.
As the options market signal favors the palladium bears, sluggish momentum amid the pre-NFP caution and a light calendar tests the commodity traders.
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