GBP/USD: Options market shows strongest bearish bias in 8 months

One-month risk reversals on GBP/USD, which measures the spread between call and put option premiums, fell to -3.638 on Monday – the lowest level since April 7 – indicating the strongest bearish bias in eight months.

The gauge has declined sharply from -0.90 to -3.638 over the past three weeks. The recent decline from -3 to -3.638 could be attributed to vanishing odds of the Brexit trade deal.

GBP/USD is currently trading near 1.3350, having declined from 1.3539 to 1.3224 in the previous two trading days.

Dec 8, 2020

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