Home GBP/USD risk reversals have nearly shed bearish bias

GBP/USD risk reversals have nearly shed bearish bias

Updated: 6 May. 2019 | 06:47

Risk reversals on GBP/USD (GBP1MRR), a gauge of puts to calls on Sterling, have nearly shed bearish bias amid Brexit optimism.

The gauge is currently trading at -0.05, the highest level Jan. 29, when it was trading at the neutral level of zero.

Notably, risk reversals have increased sharply from the March 25 low of -3.25, which indicates a sharp drop in demand or implied volatility premium for GBP puts (bearish bets).

The data indicate investors are positioning for strength in Sterling by unwinding long putts or initiating long calls (bullish bets).

GBP1MRR

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