GBP/USD’s options market is currently reporting the strongest bearish bias since April. UK’s parliament on Saturday rejected Prime Minister Johnson’s Brexit deal. GBP/USD’s options market is most bearish on Pound since April, a sign the investors are adding bets to position for a drop in Sterling on waning Brexit optimism. One-month risk reversals (GBP1MRR), a gauge of calls to puts on the British Pound crashed to -1.70 on Friday and is currently seen at -1.65. Friday’s print was the lowest level in six months. Notably, the gauge had jumped to a 21-month high of 0.125 on Oct. 11. The negative number indicates the premium claimed by (or the demand for) put options (bearish bets) is higher than the premium for call options (bullish bets). The slide from Oct. 11’s high of 0.125 to Oct. 17’s low of -1.70 indicates the investors were expecting the UK parliament to put brakes on Prime Minister Boris Johnson’s Brexit deal and hedged against potential sell-off in Pound by buying put options. More importantly, the options market maintained its bearish bias on Pound in the Asian session. Waning Brexit optimism Super Saturday turned out to be a dud with the UK parliament withholding support for the Brexit deal, forcing Prime Minister Johnson to send a letter to the EU requesting a three-month extension to article 50. Johnson will try again on Monday to secure parliament’s support for his Brexit deal in a yes/no meaningful vote, according to The Guardian. However, markets fear the Speaker could rule it out of order or MPs again withhold support for it until full legislation is passed. The GBP, therefore, may come under pressure, as indicated by the options market. As of writing, GBP/USD is trading at 1.2914, representing a 0.46% loss on the day, having hit a high of 1.2990 on Oct. 17. While the options market is preparing for Brexit delay, the analysts at Goldman Sachs lowered the probability of a no-deal Brexit to 5% from 10%. GBP1MRR Technical levels FX Street FX Street FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions. View All Post By FX Street FXStreet News share Read Next Ripple price analysis: XRP/USD brief weekend surge fizzles out as focus shifts to $0.29 FX Street 3 years GBP/USD's options market is currently reporting the strongest bearish bias since April. UK's parliament on Saturday rejected Prime Minister Johnson's Brexit deal. GBP/USD's options market is most bearish on Pound since April, a sign the investors are adding bets to position for a drop in Sterling on waning Brexit optimism. One-month risk reversals (GBP1MRR), a gauge of calls to puts on the British Pound crashed to -1.70 on Friday and is currently seen at -1.65. Friday's print was the lowest level in six months. Notably, the gauge had jumped to a 21-month high of 0.125 on Oct. 11. The negative… Regulated Forex Brokers All Brokers Sponsored Brokers Broker Benefits Min Deposit Score Visit Broker 1 $100T&Cs Apply 0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 2 T&Cs Apply 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 3 Recommended Broker $100T&Cs Apply No deposit or withdrawal feesTrade major forex pairs such as EUR/USD with leverage up to 30:1 and tight spreads of 0.9 pips Low $100 minimum deposit to open a trading account 9 Visit Site FreeBets ReviewsYour capital is at risk. 4 T&Cs Apply Visit Site FreeBets ReviewsYour capital is at risk. 5 Recommended Broker $0T&Cs Apply Trade gold, silver, and platinum directly against major currenciesUp to 1:500 leverage for forex trading24/5 customer service by phone and email 9 Visit Site FreeBets ReviewsYour capital is at risk.
