Home EUR/GBP: Value of bullish bets has surged in the last 2.5 weeks

EUR/GBP: Value of bullish bets has surged in the last 2.5 weeks

Updated: 8 Feb. 2019 | 06:02

Investors are expecting EUR/GBP to rise on account of Brexit uncertainty, risk reversals indicate.

EUR/GBP risk reversals, a gauge of calls to puts, is currently trading in favor of calls (bullish bets) at 0.75 vs zero on Jan. 21. The near 90-degree rally represents a sharp rise in the demand or implied volatility premium for the call option on the EUR/GBP pair.

A call option gives the holder a right but not obligation to buy the underlying at a predetermined price on or before a predetermined date.

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