USD/CNH: value of put options hits highest since May 2017

Omkar Godbole FXStreet Contributor

The USD/CNH one-month 25 delta reversals (CNH1MRR) are currently trading at -0.40 in favor of put options - the lowest level since June 1, 2017.

The negative print indicates that the implied volatility premium or the demand for the put options is higher than that for calls.

A put option gives the holder the right to sell the underlying at a predetermined rate on or before a specific date.

The rising demand for the put options indicates the investors are expecting a deeper drop in the USD/CNH. A similar message is being echoed by technical charts.

CNH1MRR

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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