One-month risk reversals on the British pound (GBP), a gauge of calls to puts, fell to the one-week low on Tuesday, indicating investors are adding bearish bets to position for weakness in the cable.
Risk reversals traded at -0.075 in favor of puts or bearish bets during the early Tuesday, the lowest level since February 12, according to data provided by Reuters. The gauge peaked at +0.65 in favor of calls the last Tuesday.
The negative reading indicates put options are drawing higher premium (option price) than calls or bullish bets. In other words, the options market is most bearish in a week ahead of the key UK employment data for January.
That said, GBP/USD stays bid near the fresh high since April 2018, flashed the previous day, by press time while picking up the bids near 1.4070, up 0.10% intraday.