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  • Premium or demand for call options has hit the highest level since October. 
  • Investors are addition bets to position for dollar strength. 

The options market is most bullish on the USD/INR pair in over four months. 

The one-month 25 delta risk reversals jumped to 0.60 on Tuesday – the highest level since Oct. 8, 2019 – indicating investors are adding bets to position for strength in the US dollar. 

A positive reading indicates higher demand for call options (bullish bets) compared to put options (bearish bets). 

USD/INR closed Tuesday with 0.35% gains at 71.5690. Since September, the pair has been restricted to a narrowing price range between 70.30 and 72.40. The increased demand for call options, as highlighted by risk reversals, suggests the investors are expecting USD/INR to break higher from its multi-month range.