Wednesday, April 25, 2018
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AUD/USD risk reversals – Demand for puts continues to rise
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  • AUD/USD one-month 25 delta risk reversals at a 6-month low.
  • Show strong demand for AUD bearish bets (put options).

There seems to be no respite for the Aussie dollar as the bearish sentiment in the options market continues to strengthen.

AUD/USD one-month risk reversals fell to -1.20 – the lowest level since mid-August. It means the risk reversals are being paid at AUD 1.20 puts compared to the AUD 0.975 puts on Feb. 7 and AUD 0.175 puts on Jan. 25.

The sharp decline in risk reversals (rise in demand for AUD puts) indicates the AUD/USD spot could soon drop to 0.7743 (61.8% Fib R of Dec-Jan rally).

AUD 25 delta risk reversals (AUD1MRR)

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